Australian officials on Tuesday welcomed Chevron's decision to bow out of Woodside Petroleum's massive Browse liquefied natural gas project as a chance for Chinese investors to buy in.
Chevron announced late Monday it would hand Royal Dutch Shell its interest in the Browse development in exchange for Shell's share in two gas fields in the Wheatstone LNG project further south and US$450 million in cash.
The US company already has a majority holding in Wheatstone, off Australia's mineral-rich Pilbara coast, and said increasing its stake was in line with its long-term LNG strategy.
Woodside, operator of the Browse joint venture and majority stakeholder, said Tuesday it would not oppose Chevron's deal with Shell, which it valued at US$2 billion.
The Australian energy firm sold down its own stake in Browse earlier this year, offloading a 14.7 percent interest in May to Japan Australia LNG, a joint venture of the Mitsui and Mitsubishi trading houses.BHP Billiton and BP are the other partners in the project, which is valued at some US$30 billion and is expected to produce up to 50 million tonnes of LNG a year -- more than twice Australia's current total exports.
Western Australia state premier Colin Barnett welcomed Chevron's exit from Browse as opening the door to foreign investors, particularly in Asia, with Chinese parties indicating interest in taking a stake earlier this year.
"It reduces the number of participants from six down to five in the Browse Basin and leaves space for China to come in as an equity holder," Barnett told ABC radio.
"Chevron concentrating on its other two LNG projects, the Japanese coming in as a buyer, an investor, and the high prospect of the Chinese doing the same is all part of the shuffling and the re-arranging of ownership, which is good news for the development," he added.
Australia is on track to become the world's biggest LNG producer as cleaner energy alternatives to coal are sought, with analysts predicting it will overtake Qatar by 2020 as it unlocks reserves that could last a century.
Seven of the world's 10 major LNG projects are under construction in Australia, with Aus$176 billion of private Australian and foreign investment in gas projects since 2007.
Analysts expect Australia to pip the small Gulf emirate, which holds the world's third-largest gas reserves and last year saw LNG production capacity rise to 77 million tonnes per annum (mtpa), by 2020.