DUBLIN, March 24, 2016 /PRNewswire/ --
Woodside Petroleum Ltd. has abandoned the USD 40 billion Browse liquefied natural gas project due to slumping prices in the global oil and gas markets. The project, which includes Royal Dutch Shell Plc and BP Plc as partners, sought to construct a floating liquefied natural gas (LNG) plant at James Price Point to extract and process gas from the Browse Basin off the coast of Western Australia. The global floating LNG market is forecast to grow at a CAGR of 15.2% by 2019, according to a report available from Research and Markets, but the ongoing surplus of oil and gas could result in lower growth.
Low oil and gas prices has made Browse too expensive to undertake as it currently exists, but Woodside intend to prepare a new plan and budget for future development of the resource. Woodside originally planned to build an onshore plant for a cost of more than USD 61 billion, but determined that a floating LNG plant would be more cost-efficient. The difficulty in bringing this project to fruition, and the oversupply of the LNG market, raises concerns about the viability of other LNG projects in development.
Scrapping the Browse project could have an unforeseen effect on related markets. The global floating production storage and offloading market is expected to grow at a CAGR of 12.9% by 2019, as forecast in an industry report, but this estimation could be lower if oil and gas prices continue to render floating LNG projects financially impractical.
Similarly, the global offshore mooring systems market is predicted to be worth USD 1.2 billion by 2020, but the abandonment of floating LNG projects like Browse reduces the demand for mooring systems and the growth of this market.
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SOURCE Research and Markets