Shell ups stake in Australia's Browse LNG, Chevron exits

City A.M. Reporter
Royal Dutch Shell will increase its stake in Australia's Browse LNG project by picking up Chevron's equity in the $30bn (£19bn) venture in an asset swap deal, opening up the possibility of new development options such as floating LNG.

Browse LNG has been plagued by controversy over its proposed location at James Price Point on the north-western coast of Australia, which has been opposed by some project partners, environmentalists and Aboriginal landowners.

"Shell's increased participation may promote alternative development options such as floating LNG, should a land-based project prove to be too expensive or too impractical," Morgan Stanley analyst Stuart Baker said in a note.

Shell is regarded as the industry leader in developing floating LNG and expects to bring the world's first floating LNG, Prelude LNG, online by 2017.

Shell will pay $450m and swap interests in two fields off the Australian coast for Chevron’s holdings in the Browse LNG project, Shell said in a statement.

The deal will increase Shell's share in the development to around 27 per cent, according to analysts, and make it the second largest shareholder after operator Woodside Petroleum.