Mitsubishi, Mitsui End Accord to Buy LNG From Woodside Project

Mitsubishi Corp. (8058), Japan’s biggest trading company, and Mitsui & Co. withdrew from an agreement to buy liquefied natural gas from Woodside Petroleum Ltd. (WPL)’s Browse venture in Australia after delays to the project.

The Mitsui and Mitsubishi venture, Japan Australia LNG Pty, won’t go ahead with the purchase of about 1.5 million metric tons of LNG annually from Browse because the deal depended on the project reaching an investment decision by the end of 2013, Perth-based Woodside said today in a statement.

Woodside, Australia’s second-largest oil and gas producer, scrapped a plan last year to build Browse onshore in Western Australia, estimating later that it would have cost more than A$80 billion ($71 billion). Instead, the company plans to decide in mid-2015 whether to proceed with a plan to liquefy the gas on giant ships offshore, using Royal Dutch Shell Plc (RDSA) technology.

The Japanese companies, which reached a deal in 2012 to buy a 14.7 percent stake in Browse for $2 billion, will continue to work with Woodside to jointly sell LNG from the venture to the Asian market, according to the statement.

Woodside fell 0.7 percent to A$38.62 at 1:57 p.m. Sydney time.

The Australian company remains in talks with other regional customers to sell gas from its LNG projects, including Browse, according to the statement. PetroChina Co., Shell and BP Plc (BP/) are also partners in the Browse development.

“Global demand for LNG is growing at a very fast pace,” Woodside said today in an e-mailed response to questions. “Woodside believes Browse will play an important part in future regional supply of safe and reliable LNG.”

To contact the reporter on this story: James Paton in Sydney at jpaton4@bloomberg.net

To contact the editor responsible for this story: Jason Rogers at jrogers73@bloomberg.net

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