Overview of the Browse Stake Dispute

Woodside Energy is considering exercising its pre-emption rights to veto Inpex's planned purchase of PetroChina's 10.67% stake in the Browse gas megaproject, Australia's largest unexploited offshore gas field. This potential move comes amid speculation that Inpex, if it acquires the stake, might push for a development scenario linking Browse to its Ichthys LNG project in Darwin, Northern Territory, rather than Woodside's preferred option of using its existing Karratha Gas Plant in Western Australia.

Project Details and Stakeholders

The Browse project, operated by Woodside, comprises the undeveloped Brecknock, Calliance, and Torosa gas fields offshore Western Australia. It has a forecast production capacity of 11.4 million tonnes per annum of liquefied natural gas, liquid petroleum gas, and domestic gas, with peak condensate output of 50,000 barrels per day. The current joint venture partners are Woodside (30.6%), BP (44%), Mitsubishi-Mitsui (14.4%), and PetroChina (10.67%). The fields contain a combined contingent resource of approximately 13.9 trillion cubic feet of gas and 390 million barrels of condensate.

Inpex's Proposed Acquisition and Conditions

Inpex announced on Friday that it had agreed to purchase PetroChina's 10.67% interest in Browse. However, the transaction is conditional on regulatory and joint venture approvals, including pre-emption rights. No financial details or other terms of the deal were disclosed. Woodside confirmed it will consider vetoing the deal as part of its usual transaction review processes, and could acquire the stake itself. Even if Woodside acquires the stake, its holding would remain less than BP's 44% interest.

Strategic Implications and Development Scenarios

Woodside has long viewed Browse as being exploited via its Karratha Gas Plant in Western Australia, stating that the Browse to North West Shelf project could "make a significant contribution to the region's energy supply and economic prosperity." However, industry observers suggest that with an equity interest, Inpex could push for an alternative development scenario linking Browse to its Ichthys LNG project in Darwin, Northern Territory. Key activities continue in the current concept definition phase, including invitations to tender and engagement with regulators, in support of progress towards the front-end engineering and design stage.

Energy Security Contributions

Both Woodside and Inpex have emphasized the potential of Browse to contribute to energy security in Western Australia and the Asia-Pacific region. Inpex stated that "the development of Browse has the potential to make a significant contribution to energy security in Australia and in the Asia-Pacific region," while Woodside highlighted the importance of energy security "when it matters more than ever."