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PERTH, April 30 (Reuters) - Australia's Woodside PetroleumLtd has signed a preliminary technology agreement withshareholder Royal Dutch Shell to develop its Browse gasfield using Shell's floating liquefied natural gas (LNG)technology in case it finally opts for that route.
The agreement, which Woodside announced on Tuesday, boostsexpectations it will eventually use floating LNG to tap theBrowse gas field. It comes on the heels of the Australiancompany's decision to scrap plans to build a $45 billion onshoreplant to tap the resource due to its high cost.
Woodside has outlined several potential development optionsfor Browse, including a smaller onshore plant, but the companyis widely expected to choose floating LNG to develop the Browsegas resource.
Floating LNG has "the potential to commercialise the Browseresources in the earliest possible time frame", Woodside chiefexecutive Peter Coleman said, according to a company statement.
Shell, which owns 24 percent of Woodside and is thesecond-largest shareholder in Browse, is considered to be theglobal frontrunner in developing floating LNG technology and haslobbied for the Browse gas field to be developed.
Other joint venture partners include BP Plc,PetroChina, Mitsui & Co and Mitsubishi Corp.
According to analyst estimates, choosing to use floating LNGtechnology would mean a cost savings of 20 percent.
Ballooning costs have become a major challenges for LNGdevelopers in Australia.
With $190 billion worth of LNG projects underway, thecountry is set to become the world's largest LNG exporter by theend of the decade, but more than half of the seven LNG plantscurrently under construction have had cost blowouts ranging from15 percent to 40 percent.
