April 18, 2018 / 12:01 AM / 3 months ago

UPDATE 2-Woodside sees new momentum on long-delayed Browse gas project

* NW Shelf LNG close to agreeing tariff for Browse gas

* LNG market seen short on supply by 2021, Woodside says

* Woodside aims to slash Senegal $3 bln oil project cost

* Woodside Q1 revenue up 30 pct (Recasts with CEO comments on Browse, LNG, Senegal)

By Sonali Paul

April 18 (Reuters) - The long-delayed Browse gas project off Western Australia has gained key support, with partners in the North West Shelf liquefied natural gas (LNG) plant aiming to agree on a tariff by end-June to handle Browse gas, Woodside Petroleum’s chief executive said on Wednesday.

Browse is seen as a key source of growth for Woodside but has been stuck on the drawing board for years as plans for onshore and floating LNG development estimated at $30 billion to $45 billion were scrapped.

The plan now is to develop the giant gas field to feed the North West Shelf plant, Australia’s biggest LNG plant, when its current gas source runs dry in the 2020s.

“We’ve picked up momentum over the last couple of months around Browse and some of it is now a realisation, in particular on behalf of the North West Shelf partners, that Browse needs to be the anchor tenant for the North West Shelf over the next 25 years,” Woodside CEO Peter Coleman told Reuters.

The NW Shelf joint venture partners “are very much aligned now” on completing tariff talks “by the end of the second quarter”, he said.

Woodside’s North West Shelf partners are BP, BHP Billiton, Chevron Corp, Royal Dutch Shell and Japan’s Mitusbishi Corp and Mitsui & Co .

Once the tariff is set, Woodside and its Browse partners - most of which overlap with stakeholders in the North West Shelf - will be in a stronger position to move ahead with planning how to develop the field. A final investment decision could come earlier than the current target of 2021.

“The opportunity for us is to bring that forward to be able to meet market — general consensus now says the market’s going to be short by 2021,” Coleman said.

Just two years ago, the market had been expected to remain in oversupply until around 2023, but that has changed following a sharp jump in gas demand in China.

Woodside is also pushing ahead with an oil project off Senegal, where its partners are Cairn Energy and FAR Ltd , while a dispute with FAR over Woodside’s acquisition of a 40 percent stake in the project enters arbitration.

Cairn and FAR have said the first phase of the SNE development is expected to cost around $3 billion, however Woodside is looking to cut that cost by “quite a lot”, Coleman said.

It has invited offers for a floating production storage and offloading vessel (FPSO) and other equipment for the project.

Coleman spoke to Reuters after Woodside reported a 30 percent rise in first-quarter revenue to $1.17 billion from a year earlier on increased output and higher LNG prices.

Output rose to 22.2 million barrels of oil equivalent (mmboe) from 21.4 mmboe in the March quarter last year, helped by a ramp-up in production at the Wheatstone LNG project, run by Chevron, in Western Australia.

Reporting by Sonali Paul; additional reporting By Susan Mathew in Bengaluru; editing by Richard Pullin

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