PetroChina has withdrawn from a US$40bn (A$45bn) preliminary agreement to buy natural gas from the Woodside Petroleum-developed Browse Basin LNG project offshore Western Australia.
According to the agreement signed in September 2007, PetroChina will buy up to 3.3 million tonnes of LNG every year for 20 years.
Factors for the lapse of the deal have not been mentioned, however, sources say that PetroChina may not have been satisfied with the cost in the two years since the deal was established.
The lapse of the deal, which had not been settled by the 31 December deadline, has resulted in Woodside Petroleum seeking new customers. The lapse enables negotiations of terms and price for a major portion of Browse Basin gas.
Woodside is in negotiations with other Asia-Pacific LNG customers for the Browse project, and has signed an agreement with Osaka Gas for the potential annual sale and purchase of up to 1.5 million tonnes of LNG from the Browse development.
Woodside, together with its partners BHP Billiton, Chevron and Royal Dutch Shell, is expected to make a final investment decision on the Browse project mid-2012.