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.
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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.