Gas Week

EWN Publishing

PetroChina agrees to pay $US7 to $US9 per million British thermal units for Browse gas; China now willing to meet market LNG prices

Posted by gasweek on 26 September, 2007

According to Angela Macdonald-Smith, UBS assumes the Browse project is initially developed using a seven-million-tonne-a-­year onshore plant starting production in 2014, adding a second unit later to double capacity, reported The Sydney Morning Herald (7/9/2007, p. 36).

PetroChina pays $US7 to $US9 compared with existing prices in Asia of about $US8 to $US10: It estimates PetroChina agreed to pay $US7 to $US9 ($8.50 to $11) per million British thermal units for Browse gas, com­pared with existing liquefied natural gas prices in Asia of about $US8 to $US10. Woodside’s share of the project may be worth as much as $8.13 billion, or between $9 and $11.93 a share, UBS said.

China now willing to meet market LNG prices: BP has about 17 per cent of Browse, as does Chevron, while BHP Billiton owns 9.7 per cent and Woodside’s 34 per cent shareholder Royal Dutch Shell has 9.1 per cent. Credit Suisse in a report issued on 6 September increased its valuation of Woodside by 3 per cent to $37.48 a share as a result of the PetroChina deal. It assumes Woodside gets an average price of about $US10 per million British thermal units for Browse liquefied natural gas, which Credit Suisse said may be in line with the price PetroChina agreed to pay Shell earlier this week for liquefied natural gas from the Gorgon project, also in Western Australia. “PetroChina’s recent activity, securing two separate LNG conditional supply agreements, provides further evidence China is now will­ing to meet market LNG prices,” Merrill Lynch said in a separate report.

The Sydney Morning Herald, 7/9/2007, p. 36

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