(EnergyAsia, December 18 2014, Thursday) — Woodside Petroleum Limited has delayed its investment decision in the proposed massive US$40 billion Browse liquefied natural gas (LNG) project off the coast of western Australia in favour of new opportunities in Canada.

Australia’s second largest oil and gas producer said it is buying a 50% stake in a joint venture with Chevron to build a US$40 billion LNG project in the coastal town of Kitimat in Canada’s British Columbia (BC) province. Woodside is acquiring the stake in Kitimat LNG along with shares in the A$29 billion Wheatstone LNG plant, offshore gas fields and an oil-producing field in Australia from US upstream firm Apache in a package deal worth a total of US$2.75 billion. (US$1=A$1.20).

In a statement, the Perth-based firm said it has delayed its final investment decision on the Browse project, which has been plagued by rising cost in recent years, by nearly a year to mid-2016 in view of falling oil and gas prices. The other shareholders of Browse LNG are Shell Development (Australia) Pty Ltd, BP Developments Australia Pty Ltd, Japan Australia LNG (MIMI Browse) Pty Ltd and PetroChina International Investment (Australia) Pty Ltd.

Woodside’s CEO Peter Coleman said “challenging marker conditions” have enabled it to purchase “very high quality assets” including the 50% stake in Kitimat and oil and gas reserves in BC’s Horn River and Liard basins. The package of deals is subject to approvals from regulators and the shareholders of the different assets and projects.

The transaction will help the shareholders of both Woodside and Apache realise the stated realignment of their respective investment portfolios.

Woodside has been looking to invest outside of Australia while Apache is under pressure from hedge fund shareholder Jana Partners LLC to reduce its international exposure in favour of domestic operations in the US.

In a separate deal, Woodside has agreed with BP to take a 20% stake in the UK major’s project to explore and develop hydrocarbon resources in the Scotian Basin located off the coast of Nova Scotia in eastern Canada.

The licences cover 14,000 sq km in water depths ranging from 500 to 3,600 m, with drilling of exploration wells expected to start 2017.a

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