Mitsubishi Corp. and Mitsui & Co. have withdrawn from an agreement to buy liquefied natural gas from Woodside Petroleum Ltd.'s Browse venture in Australia after delays to the project.
The Mitsui and Mitsubishi venture, Japan Australia LNG, won't go ahead with the purchase of about 1.5 million metric tons of LNG annually from Browse because the deal depended on the project reaching an investment decision by the end of 2013, Perth-based Woodside said Thursday in a statement.
Woodside, Australia's second-largest oil and gas producer, scrapped a plan last year to build Browse onshore in Western Australia state, estimating later that it would have cost more than 80 billion Australian dollars ($71 billion). Instead, the company plans to decide in mid-2015 whether to proceed with a plan to liquefy the gas on giant ships offshore, using Royal Dutch Shell technology.
The Japanese companies, which reached a deal in 2012 to buy a 14.7 percent stake in Browse for $2 billion, will continue to work with Woodside to jointly sell LNG from the venture to the Asian market, according to the statement.
The Australian company remains in talks with other regional customers to sell gas from its LNG projects, including Browse, according to the statement. PetroChina Co., Shell and BP are also partners in the Browse development.
"Global demand for LNG is growing at a very fast pace," Woodside said Thursday in an emailed response to questions. "Woodside believes Browse will play an important part in future regional supply of safe and reliable LNG."