Woodside Petroleum sells stake in proposed LNG development

Woodside Petroleum (ASX: WPL) has sold part of its stake in the proposed Browse Liquefied Natural Gas (LNG) development to Japanese company MIMI Browse for $2 billion, gaining Japanese distribution for the project in the process.

Woodside is the major equity holder and operator of the proposed $30 billion Browse LNG development on the Kimberley coast.

Gas from three fields 425km offshore in the Timor Sea will be brought to the Browse LNG development site 60km north of Broome in Western Australia for processing and then sold overseas.

The sale will reduce Woodside’s stake in the development from 46% to 31.3%.

“Browse is a world class resource and the level of interest shown during this process reflects the strong ongoing demand for LNG from premium developments such as this,” Woodside CEO Peter Coleman said.

“The transaction includes a joint marketing agreement between Woodside and MIMI under which the parties will jointly market co-mingled LNG volumes to the Asian market, primarily Japanese customers,” a Woodside spokesman said.

“MIMI has also offered assistance in obtaining competitive financing for the development with Japanese banks indicating their support.

“Woodside has also entered into a non-binding memorandum of understanding with MIMI’s ultimate parent companies Mitsui and Mitsubishi Corporation which provides for them to jointly or independently progress discussions with Woodside with respect to potential collaboration and alliance on other opportunities globally,” Woodside said.

MIMI Browse will join partners Woodside Energy, Shell, BP, Chevron and BHP Billiton in the huge project.

When up and running the development will able to process 15 million tonnes of LNG per year.

LNG would be pumped via eight pipelines to a 2km jetty and in the construction phase the precinct would include a camp to house 8000 workers.

Woodside shares rose 4.24% at 1.30pm AEST to $36.40.