Woodside Says Court Ruling Won’t Stop Its Browse Gas Project

Woodside Falls After Report
The Woodside Petroleum Ltd. headquarters in Perth. Photographer: Ron D'Raine/Bloomberg

Woodside Petroleum Ltd., Australia’s second-biggest oil and gas producer, said its Browse natural-gas processing plant won’t be delayed by a court ruling that land acquisition notices were unlawful. The shares fell.

“We do not believe that this result will impact on the project schedule,” the Perth-based company said today in an e-mailed statement. “The provision of the land for the Browse liquefied natural gas precinct is a matter for” the Western Australian state government, it said.

The state’s Supreme Court ruled three notices of intention to acquire the land at James Price Point were invalid because they didn’t contain descriptions of the area, though said the declaration didn’t stop the government issuing further notices, the Australian Associated Press reported. The project may cost about A$38 billion ($39 billion), according to Deutsche Bank AG.

“The project, if it goes ahead, would be absolutely good for the company,” Johan Hedstrom, an analyst at Bell Potter Securities Ltd., said in a phone interview from Sydney today. “Most analysts are saying that it’s got some issues.”

Woodside dropped 2.1 percent to A$33.48 at the close in Sydney. The benchmark S&P/ASX 200 Index declined 1.5 percent. Hedstrom has a “buy” rating on Woodside with a target price of A$39.80 a share.

The state government’s original notice of intent to buy the land included an area of 7,000 hectares, though the project only needs 3,500 hectares, Premier Colin Barnett told reporters today. The court’s decision means the government will resubmit the notice specifying which of the 3,500 hectares it needs to be used for the project.

The ruling “doesn’t mean a great deal,” Barnett said.

Woodside has said it’s aiming to approve Browse, a venture with Chevron Corp., Royal Dutch Shell Plc, BP Plc and BHP Billiton Ltd., in mid-2012.

Asian Demand

Woodside also plans to expand the A$14.9 billion Pluto LNG venture in Western Australia and develop the Sunrise projects. Those are among more than A$200 billion of proposed Australian LNG developments seeking to tap Asian demand.

The company’s plan, backed by the Western Australian state government, to build the processing hub at James Price Point, near the tourist town of Broome on Australia’s remote north-west coast, has attracted protests from indigenous and environmental groups. First gas from Browse isn’t expected until 2017 at the earliest, Woodside said on its website Nov. 14.

Phillip James Roe, who represented some traditional land owners in the court action, told Australian Broadcasting Corp. radio that the court decision may delay Woodside’s project. The state government could resubmit the land notices, he said.

Chief Executive Officer Peter Coleman, who took control of Woodside in May, plans to develop an estimated A$75 billion in Australian LNG projects with existing partners including BP and Chevron.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE