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Woodside to Recommend Floating LNG to Develop Browse Project

Aug. 20 (Bloomberg) -- Woodside Petroleum Ltd., Australia’s second-biggest oil producer, will recommend using Royal Dutch Shell Plc’s floating liquefied natural gas technology to its partners to develop the Browse project.

The selection of floating LNG requires the approval of the Browse partners, including BP Plc, PetroChina Co. and Shell, Perth-based Woodside said today in a statement.

“A compelling case has emerged for floating LNG as the best option for early commercialization” of Browse, off the west Australian coast, Chief Executive Officer Peter Coleman said in the statement.

Woodside in April scrapped a plan to build Browse onshore at an estimated cost of $45 billion, in favor of studying cheaper options as costs in Australia rise. Floating LNG may be almost 20 percent cheaper than building the Browse project on land, Deutsche Bank AG said earlier this year.

“Shell’s floating LNG technology is the fastest, most economic and the best technical solution available for Browse,” Andrew Smith, a director of Shell Australia, said in an e-mailed statement. The project partners will need to make “a formal decision to advance the design work based on Woodside’s recommendation.”

Woodside last year sold a 14.7 percent stake in Browse to Mitsubishi Corp. and Mitsui & Co. for $2 billion. BHP Billiton Ltd., Australia’s largest oil producer, agreed in December to sell its stake in Browse to PetroChina for $1.63 billion.

Exxon Mobil Corp. plans to build the world’s largest floating LNG project off the coast of Western Australia.

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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