Woodside's Browse Gas Project Faces Financial Viability Concerns Amidst Cost Surge

A new economic impact assessment report commissioned by Woodside and conducted by Deloitte Access Economics has estimated total capital expenditure of A$48.7 billion (US$35 billion) for the Browse gas project offshore Australia. This represents a near-32% increase from the initial A$37 billion estimate in 2019, raising questions among industry observers about the project's financial viability. The Browse project is Australia's largest undeveloped offshore gas and condensate resource, containing 14 trillion cubic feet of gas and nearly 390 million barrels of condensate, and has faced legal challenges from environmental groups.

Financial Viability and Market Concerns

Institute for Energy Economics and Financial Analysis (IEEFA) analyst Joshua Runciman noted that while LNG prices have spiked due to the Middle East conflict, a new wave of supply is likely to dampen prices before Browse is developed. IEEFA analysis in 2025 deemed Browse "expensive" with a breakeven cost of A$7.80 per gigajoule and US$7.80 per million British thermal units, based on the 2019 cost estimate. The International Energy Agency (IEA) forecasts a long-run price of US$7.50 per million Btu, which Runciman said "would make Browse LNG unviable." Additionally, Woodside's requirement to sell 15% of Browse gas into the Australian market at prices likely below LNG prices could further impact financial viability.

Project Details and Economic Benefits

The Browse project is anchored by two floating production, storage and offloading vessels, with gas flowing to the existing Woodside-operated North West Shelf LNG facility via a 900-kilometre subsea export pipeline. Federal approvals were secured in September for the North West Shelf extension, but Woodside continues to face challenges from conservationist groups while awaiting state and federal approvals. The Deloitte report claims Browse has the potential to uplift national GDP by A$141 billion over the project's life, support energy security in Western Australia, and allow deferment of renewable energy and network investment, saving total system costs as industries mature. Woodside CEO Liz Westcott stated that "independent modelling shows Browse has the potential to power homes and businesses, support thousands of Australian jobs and generate significant revenue for governments while also helping to manage the risks and costs of the energy transition."

Support and Criticism

The Chamber of Minerals and Energy WA (CME) welcomed the report, with CEO Aaron Morey emphasizing that "reliable and affordable energy is the most basic building block of advanced economies" and that Browse would make Australia "indispensable to our trading partners." However, conservationists criticized the report. Australian Conservation Foundation (ACF) CEO Adam Bandt called the proposal "a disaster that should be stopped in its tracks," noting that the gas industry makes big profits selling gas overseas while paying hardly any gas tax. A Woodside spokesperson countered that supplying domestic gas to Western Australian industry has been a core part of operations for decades. Australia's federal government recently announced a domestic gas reservation policy of 20% of exports, effective 1 July 2027, though implementation details remain undisclosed.