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Australia's Woodside Petroleum Ltd. on Friday announced it was shelving onshore plans for the controversial multi-billion-dollar Browse liquefied natural gas export project.
The oil and gas giant, operator of the Browse LNG Development in Western Australia, said it had "determined that the development concept does not meet the company's commercial requirements for a positive final investment decision".
Alternative ideas would now be considered with joint venture partners, Woodside said in a statement to the Australian Stock Exchange. The partners include BP, Japanese consortium Mitsubishi and Mitsui, and PetroChina.
"Woodside will immediately engage with the Browse joint venture to recommend evaluation of other development concepts to commercialise the Browse resources," the company said.
This could include floating technologies, a pipeline to existing LNG facilities or a small onshore option.
The onshore project was expected to produce 12 million tonnes of liquefied gas a year with first shipments planned in 2017.
It was among around a dozen gas export terminals planned in Australia, which stands to eclipse Qatar as the world's largest exporter of LNG by the end of the decade, driven by global demand for cleaner energy sources.
Technical and environmental concerns have plagued the greenfield project. Environmental groups are fighting industrialisation of the pristine Kimberley region and demanded offshore development for the scheme.
Woodside holds a 34 percent equity interest in the East Browse joint venture and a 17 percent interest in the West Browse joint venture.
Australia currently exports 20 million tonnes of gas per year, primarily to Asian countries, and the government has forecast total national capacity to quadruple in coming years to more than 80 million tonnes.
Woodside had said Browse, which comprises three offshore deep-water gas and condensate fields 425 kilometres (263 miles) north of Broome, would contribute more than Aus$50 billion (US $52.5 billion) to the Australian economy.