Woodside Petroleum says it will push ahead with plans to jointly sell gas from its proposed Browse project despite a Japanese partner terminating a purchase deal.
Japan Australia LNG, known as MIMI as it is a joint venture between Mitsubishi Corporation and Mitsui, had agreed to buy around 1.5 million tonnes of liquefied natural gas a year from the Browse LNG development, subject to a final investment decision on Browse being taken by December 31, 2013.
Woodside and its joint venture partners - Japan's Mitsui, PetroChina, Shell and BP - recently decided to pursue a floating LNG option, and will make a final investment in the third quarter of 2015.
"As a result of the Browse joint venture participants deciding not to proceed with an onshore development and to enter basis of design for a floating LNG development concept, both parties recognise that this condition will not be satisfied," Woodside said in a statement on Thursday.
"Consequently, MIMI has today given Woodside notice terminating the sales and purchase agreement."
It comes eight months after Woodside's sale of equity in the Browse LNG development to MIMI.
Woodside said it will continue to work actively with MIMI on the marketing of co-mingled LNG volumes in the Japanese market.
"In addition, Woodside remains in ongoing discussions with other regional customers regarding potential sales from its portfolio of Australian LNG developments, including Browse," the company said.
In December Woodside chief executive Peter Coleman indicated the company was in a strong position to sell gas in Japan as the nation struggles to secure energy after the Fukushima nuclear accident, but he would not reveal details of recent price negotiations.
Woodside expects to complete its pricing negotiations by April 2014.
Meanwhile, analysts expect Royal Dutch Shell, which owns a 23 per cent stake in Woodside, to begin selling down its interest in coming weeks as its new chief executive Ben van Beurden takes the reins.
Shares in Woodside dropped 34 cents, or 0.87 per cent, to $38.56.
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