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Woodside clear to sell part of its stake in Browse project

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Woodside Petroleum has received the regulatory all-clear to sell a third of its stake in the $30 billion Browse gas project to Japan’s Mitsubishi Corporation and Mitsui & Co.

The Japanese companies will buy a 14.7 per cent stake in liquefied natural gas (LNG) project in Western Australia, valued at $US2 billion ($A1.96 billion), through their Perth-based joint venture company, Japan Australia LNG (MIMI).

Analysts say the move will spread the risk between Woodside and its joint venture partners BHP Billiton, BP, Chevron and Shell which elected not to match the MIMI offer.

The deal is unlikely to affect the final decision date to proceed with the project, which was recently pushed back to the first half of 2013.

While MIMI would end up with a 14.7 per cent share in the entire development, Woodside’s interest would fall to 31.3 per cent from 46 per cent.

Woodside on Tuesday said the Foreign Investment Review Board (FIRB) had given the green light to the deal.

“Woodside is now working with the Browse joint venture partners to finalise the sale, making MIMI a party to the Browse joint ventures,” the company said in a statement.

Woodside’s shares closed 56 cents, or 1.76 per cent, lower at $31.25.

MIMI intends to buy about 1.5 million tonnes of LNG a year from the Browse development for an undisclosed price.

It will also take a 16 per cent stake in the East Browse joint venture and an 8.0 per cent interest in the West Browse project.

Woodside is the major equity holder and operator of the proposed project off the Kimberley coast.

The project aims to commercialise the Browse joint venture’s three gas and condensate fields – Brecknock, Calliance and Torosa – 425km north of Broome.

Under the plan, gas and liquids from these fields would be brought to an onshore LNG plant at Browse LNG Precinct, 60km north of Broome.

Woodside in April again pushed back the final decision date for the Browse development to the first half of 2013, saying it needed more time to consider engineering and design work.

State One Stockbroking industry analyst Peter Kopetz said MIMI’s stake would diversify the base and spread the risk among the participants.

“Maybe there’s a perception from the market that perhaps the other participants weren’t that interested,” Mr Kopetz said.

“But it shows the others are happy to have MIMI on board.”

Bringing on an new partner would not increase the chances of further delays to the company’s final decision on Browse.

“Woodside are moving the project forward quite nicely,” he said.