PERTH (miningweekly.com) – Oil and gas major Woodside has entered into the front-end engineering and design (FEED) phase for its Browse floating liquefied natural gas (FLNG) project, off the coast of Western Australia.

CEO Peter Coleman said entering the FEED phase was a significant step towards developing the Browse resource.

The Browse FLNG development concept was based on three FLNG facilities using project partner Shell’s technology and Woodside’s offshore development expertise to commercialise the Brecknock, Calliance and Torosa fields, which have contingent resources of 15.4-trillion cubic feet of dry gas and 453-million barrels of condensate.

The decision to enter into the FEED phase followed the Browse joint venture (JV) participants entering into a domestic gas and supply chain key principal agreement (KPA) with the state government.

The KPA set out the JV participants' commitment to negotiate a development agreement with the state government reflecting agreed-upon principles, including the commitment to reserve some 15% of the LNG production from the state’s 65% shareholding in the Torosa field, which equated to some 0.8-trillion cubic feet of dry gas.

The KPA also contemplated marketing Browse gas volumes reserved for domestic gas diligently and in good faith with potential buyers.

In relation to the supply chain commitments, it was proposed that existing and emerging infrastructure and services, where available, would be leveraged to support an efficient cost effective supply chain.

Western Australian Premier Colin Barnett has hailed Woodside’s decision to enter into the FEED phase as a positive development.

“News that this project is progressing well is excellent for the resources sector in Western Australia and for the state as a whole. This decision will lift confidence in resources and in the business community.”

As part of the entry into the FEED phase, the Browse JV partners have also entered into an equity alignment deed, which comprises a series of exchanges in equity interest between the participants, establishing a single aligned interest for each of the participants across the project.

No money was exchanged in this transaction.

Subject to approval, Woodside’s participating interest in the project would be 30.6%, accounting for some 4.7-trillion cubic feet of dry gas and 138.6-million barrels of condensate.

In parallel, Woodside and the JV partners also entered into a new joint operating agreement that sets out the terms of governance and management of the Browse assets, and supports the progression of the proposed development to a final investment decision.

A final investment decision has been targeted for the second half of 2016.