SYDNEY, AUSTRALIA: BP has agreed to acquire Shell’s 27% stake in the Browse joint venture, thus extending its holding in Australia’s largest untapped gas resource. This deal may improve the development prospects for the long-stalled project.

The Browse project, which is estimated to cost $20.5 billion, has been stuck on the drawing board for years but is now being considered as a replacement for ageing gas fields to supply the North West Shelf LNG (liquefied natural gas) plant.

The development of Browse would extend the life of the North West Shelf LNG plant for decades, helping to meet demand for LNG from Australia’s biggest trading partners, including China, Japan, and South Korea, even as they turn to cleaner energy.

In a statement issued on Saturday, Shell Australia said it had agreed to sell its stake in Browse because the “asset is no longer a strategic fit in the context of Shell’s global portfolio.” If the deal goes ahead, BP will increase its stake in Browse to 44%, overtaking the operator Woodside Energy Group’s 30.3% stake. Woodside, BP, and Shell are also all stakeholders in the North West Shelf LNG plant.

“BP believes development of the Browse gas resources could make a significant contribution to energy security in Australia and to the Asia Pacific region,” a BP spokesperson said. BP’s move comes after the company scaled back its climate targets in February with plans to produce more oil and gas for longer.

Despite BP’s move, the project is still faced with a number of hurdles. The Browse project has been criticised by environmentalists, who say it will contribute to climate change and that BP’s acquisition of Shell’s stake is contrary to BP’s net-zero commitment.

The project has also been plagued by cost overruns, with its estimated price tag increasing from $12 billion to $20.5 billion in the last decade.

However, BP has said it supports the concept of using carbon capture for the project and processing Browse gas in the North West Shelf LNG plant. The company also claims that developing the Browse gas resource would make a significant contribution to energy security in Australia and the Asia Pacific region, highlighting the project’s potential to meet demand for LNG from the region’s largest trading partners.

Overall, the acquisition of Shell’s stake in Browse is a significant move by BP, which is looking to expand its presence in the Australian energy market. The project has faced significant obstacles, but BP’s commitment to carbon capture and its belief in the project’s potential to contribute to energy security in the region may help to move the project forward.

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