Energy giant PetroChina Co (中國石油) has pulled out of a US$40 billion deal to buy natural gas from a project off Australia, leaving Woodside Petroleum Ltd looking for new customers.
Woodside informed Australia’s stock exchange on Monday that an early stage agreement for the Browse Basin liquefied natural gas (LNG) project off Western Australia state had not been settled by a New Year’s Eve deadline and had now lapsed.
Reasons for allowing the deal to lapse were not given. A spokesman for PetroChina in Beijing, Liu Weijiang, said yesterday he had no information on the deal and asked a reporter to call again later.
Under the September 2007 agreement, PetroChina would potentially buy up to 3 million tonnes of LNG per year from the project for up to 20 years.
At the time, it was one of Australia’s biggest export deals with an estimated worth of A$45 billion (US$40 billion).
Since then, deals between prospective developers of the massive gas reserves on Australia’s so-called Northwest Shelf and customers have accelerated, with companies in China, Japan and South Korea signing on to multibillion dollar, two-decade agreements last year.
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The lapse of the PetroChina deal means that the terms, including price, for a large chunk of the Brown Basin gas are once again fully open to negotiation.
“The deal was good at the time, but in the past two years things have been changing rapidly,” said Peter Kopetz, energy analyst with Western Australia-based State One Stockbroking.
Woodside had hoped the Browse project would be in production by 2012, but the company said on Monday that this timeline was no longer realistic and a final investment decision by partners including Woodside, Chevron, BHP Billiton and Royal Dutch Shell would not be made until mid-2012.
Woodside said that an agreement for CPC Corp, Taiwan (台灣中油) to buy up to 3 million tonnes of LNG per year for up to 20 years from the Browse project was still in place, and the company was looking for more customers.
“Woodside remains in ongoing discussions with other Asia-Pacific LNG customers in relation to potential sales from its portfolio of Australian LNG developments, including the Browse project,” Woodside said in a statement.
Woodside shares were trading about 1 percent higher yesterday at A$48.10.
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