Shell is selling its stake in Australian gas project to BP

Shell Plc signed an agreement to sell to BP Plc its 27 per cent stake in the carbon-intensive Browse natural gas project off the northwest coast of Australia, one of the country’s largest untapped gas fields.

“The Browse asset is no longer a strategic fit in the context of Shell’s global portfolio,” Shell Australia said in a statement, without disclosing the price. A BP spokesperson confirmed the deal, saying it would take the company’s stake in the project to 44 per cent. The sale is subject to regulatory approvals. 

Browse has the potential to produce 11.4 million tons of LNG, liquefied petroleum gas and domestic gas a year, and is a key potential development amid increasing global fuel demand. Woodside Energy Group is operator of the project and other partners include PetroChina Co. and Japan Australia LNG Pty.

Still, the development, which would emit at least 70 million tons of carbon dioxide equivalent over 30 years of operations, has been opposed by climate action campaigners because it will generate more emissions in gas production than other key projects in Australia. The joint venture is reviewing ways to manage the emissions, including the feasibility of carbon capture and storage. 

“BP believes development of the Browse gas resources could make a significant contribution to energy security in Australia and to the Asia-Pacific region,” the company spokesperson said. 

Woodside estimates capital expenditure of A$36 billion ($24 billion) for Browse and the North West Shelf Project Extension in Western Australia through to the 2060s, according to its website.

© 2023 Bloomberg L.P.

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