• 3 minutes Oil Price Could Fall To $30 If Global Deal Not Extended
  • 8 minutes Why Is America (Texas) Burning Millions of Dollars Per Day Of Natural Gas?
  • 11 minutes Is $60/Bbl WTI still considered a break even for Shale Oil
  • 15 minutes CNN:America's oil boom will break more records this year. OPEC is stuck in retreat
  • 5 hours The Pope: "Climate change ... doomsday predictions can no longer be met with irony or disdain."
  • 2 days Hormuz and surrounding waters: Energy Threats to the World: Oil, LNG, shipping markets digest new risks after Strait of Hormuz attack
  • 2 hours Greenpeace claims one oil rig is "pushing the world closer to a climate catastrophe"
  • 2 hours Middle East on brink: Oil tankers attacked off Oman
  • 10 hours The Latest: Iranian FM Says US Cannot Expect To ‘Stay Safe’
  • 23 hours Russia removes special military forces from Venezuela . . . . Maduro gone by September ? . . . Oil starts to flow ? Think so . .
  • 2 days Never Knew Gasoline Prices were this important!
  • 1 day Plants are Dying
  • 9 hours Emmissions up, renewables nowhere
  • 2 days The Magic and Wonders of US Shale Supply: Keeping energy price shock minimised: US oil supply keeping lid on prices despite global risks: IEA chief
  • 1 day We Are Better Than This
  • 2 days (Un)expectedly: UK Court Sets Assange U.S. Extradition Hearing For February 2020
  • 1 hour Britain makes it almost 12 days with NO COAL
Alt Text

Oil Flat Despite Middle East Tensions

Oil markets appear to have…

Alt Text

The U.S. Production Boom Is Becoming A Problem

While energy demand grew at…

Charles Kennedy

Charles Kennedy

Charles is a writer for Oilprice.com

More Info

Trending Discussions

$40 Billion LNG Project In Australia Cancelled Amid Low Prices

The crash in LNG prices has claimed a major victim. Woodside Petroleum and its partners, which include Royal Dutch Shell, BP, and PetroChina have decided to cancel a massive LNG project in Australia because the economics no longer work.

Related: China’s Oil Majors See Production In Biggest Fields Shrink

The Browse LNG project was planned for Western Australia, a $40 billion floating LNG export facility that would have sent Australian natural gas abroad. Citing the “extremely challenging” market, the project was scrapped on March 22. “It’s very, very difficult for us to invest in this price environment,” Woodside’s CEO Peter Coleman said.

“We’ve got a glut of LNG at the moment and a large number of potential projects out there,” Neil Beveridge, a Hong Kong-based analyst at Sanford C. Bernstein & Co., told Bloomberg in an interview. “The interesting question for Woodside is, ‘What will they do next?’ This removes an organic growth driver.” Related: The Current Oil Price Rally Is Reaching Its Limits

Browse LNG faced an array of setbacks. The project originally had an onshore site in mind, but ran into stiff opposition from local communities. That led the developers to an offshore floating concept, which actually trimmed costs by 35 percent.

Still, with LNG prices a fraction of what they once were, the decision does not come as a surprise. A handful of other large LNG export facilities that have been planned for Australia are also getting second looks. Browse had failed to secure any customers for its planned capacity, and with LNG prices now down to multiyear lows, it would be much more difficult for this project to turn a profit than for some competing projects that sealed contracts years ago. Related: Chile Sees Unrest In Its Gold And Copper Sectors

For example, Chevron’s $54 billion Gorgon LNG project, which just came online, has raised questions about its long-term profitability. However, Gorgon at least already had most of its capacity under long-term contracts. Woodside’s Browse LNG, even if it found buyers, would struggle to make the numbers work with LNG prices so low. The company’s chief executive said in February that now was “not the time to be reckless” with spending.

LNG prices for April delivery to Asia averaged just $4.46 per million Btu (MMBtu), about one quarter of the price from just two years ago.

By Charles Kennedy of Oilprice.com

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage

Trending Discussions


Leave a comment

Leave a comment





Oilprice - The No. 1 Source for Oil & Energy News