Woodside Petroleum has decided to put its $40bn Browse floating liquefied natural gas (FLNG) development in offshore Western Australia on hold due to low oil prices.
The news follows completion of front-end engineering and design (FEED) work for the project.
Woodside CEO Peter Coleman said: "The decision represents a disciplined approach to large-scale capital investment and is consistent with our requirements for a development concept to be commercially robust across a range of scenarios.
"Woodside remains committed to the earliest commercial development of the world-class Browse resources and to FLNG as the preferred solution, but the economic environment is not supportive of a major LNG investment at this time."
Meanwhile, the company plans to pursue further capital efficiencies for the Browse project and will work with the joint venture (JV) participants to prepare a new work programme and budgeting proceeding with development activities.
Woodside remains focused on satisfying its work programme commitments under the Browse retention leases, which were renewed in 2015.
The existing term of the leases will end in mid-2020.
Woodside has 30.6% participating interest in the Browse project and plans to take final investment decision during the second half of this year.
Other partners are Shell Australia (27%), BP Developments Australia (17.33%), Japan Australia LNG (14.40%) and PetroChina International Investment (10.67%).
Browse JV participants are preparing a new work programme to evaluate concept select phase activities.
Image: The Browse FLNG development is 425km north of Broome, Western Australia. Photo: courtesy of Shell.