As high as costs go in Australia the shares in these projects keep shuffling hands. $1.63 Billion for 8.3% in Browse and 20% in deep risky offshore play. Interesting
"BHP Sells Browse LNG Stake to PetroChina for US$1.63 Billion
Published December 11, 2012Dow Jones Newswires
BHP Billiton Ltd. (BHP) said Wednesday it had agreed a US$1.63 billion cash deal to sell its stake in the proposed Browse gas-export project in Australia to PetroChina Co. (PTR), China's largest listed oil producer by market value.
The deal involves PetroChina buying BHP's 8.33% stake in the East Browse joint venture and its 20% interest in the West Browse joint venture offshore Western Australia state.
Existing participants including Woodside Petroleum Ltd. (WPL) and Royal Dutch Shell PLC (RDSB) hold the right to match PetroChina's offer, which also needs regulatory approval.
International companies have committed more than US$170 billion to build liquefied natural gas, or LNG, projects on Australia's coastline, putting the country on track to overtake Qatar as the world's top exporter of LNG by the end of the decade. LNG is natural gas chilled to a liquid so that it can be shipped by sea.
However, the scale of investment in LNG is heaping pressure on an already stretched resources services sector, with LNG projects competing with big mining developments in Western Australia and Queensland state for pipe layers, welders and engineers. In a move to keep a lid on wage inflation and other costs, Australia is introducing special agreements to attract foreign workers on its biggest projects.
Browse is among a second wave of LNG projects in Australia that are yet to start construction and won't ship cargoes until 2018 at the earliest, likely putting them in competition with new gas supply coming out of North America or East Africa.
Located in the deep waters of the Browse Basin, the resource contains an estimated 15.5 trillion cubic feet of recoverable gas and additional volumes of condensate, a type of light oil.
But the gas has a high carbon-dioxide content and will be technically challenging to extract. It is also far offshore, requiring a long pipeline to be built to processing facilities on the coast at James Price Point.
Woodside Chief Executive Peter Coleman said last month that investors in Browse remained on track to make a development decision on the project by the middle of next year, meeting a requirement laid down by the Western Australia state government.
Analysts estimate the Browse project will cost more than US$30 billion to build. But the development's close proximity to resource-hungry Asian markets, including China, and Australia's stable political environment makes it attractive to new investors like PetroChina.
Shell raised its stake in the Browse project through an asset swap with Chevron Corp. (CVX) in August, following an earlier deal this year that saw Japan's Mitsubishi Corp. (8058.TO) and Mitsui & Co. (8031.TO) acquire a 14.7% stake in the development from Woodside for US$2 billion."
