Woodside Energy's Browse LNG project costs surged to A$48.7 billion amid delays, environmental hurdles, and expanded carbon capture requirements.
Woodside Energy's long-delayed Browse Liquefied Natural Gas (LNG) project in Australia is now projected to cost approximately A$48.7 billion (US$35.2 billion), a significant increase from its 2019 estimate of A$27.3 billion. This revised figure, based on an economic impact assessment by Deloitte Access Economics commissioned by Woodside, positions Browse as one of the largest capital expenditure projects in Australian history.
The substantial cost escalation and prolonged delays are attributed to several factors. These include general inflation, significant scope changes, and the addition of a major carbon capture and storage (CCS) component in 2023. Furthermore, the project has faced years of regulatory hurdles, particularly regarding environmental approvals, and protracted negotiations over a processing contract. Environmental groups have vehemently opposed the development, citing potential threats to the ecologically sensitive Scott Reef, a habitat for endangered pygmy whales and turtles. The high carbon dioxide content in the Browse gas and the plan to process it through the existing, older North West Shelf (NWS) plant have also raised environmental concerns, making the CCS component crucial for regulatory defensibility.
The Browse project aims to commercialize one of Australia's largest undeveloped offshore gas resources in the Browse Basin, off Western Australia. Gas from the Brecknock, Calliance, and Torosa fields will be transported via a 900 km pipeline to the Karratha Gas Plant for processing. This project is critical for extending the operational life of the NWS LNG facility, which secured a 40-year extension until 2070. The integrated CCS system is designed to inject up to 4 million metric tons of CO2 annually back into the Browse reservoirs, aiming to reduce direct project emissions by 47%.
Economically, the project is touted to deliver substantial benefits, with Woodside projecting a long-term uplift of over A$141 billion in national Gross Domestic Product (GDP) and more than A$56 billion in taxes, royalties, and excise, including A$19.8 billion in petroleum resource rent tax. It is also expected to create between 3,000 and 4,760 direct and indirect full-time equivalent jobs across Australia at peak operations. Approximately 80% of these economic impacts are anticipated to benefit industries outside the direct oil and gas sector, such as construction and services.
However, industry-specific impacts highlight the challenges of developing such large-scale projects. The high estimated cost of Browse gas could make it less competitive compared to rival producers like Qatar in international LNG markets and potentially lead to higher domestic gas prices in Western Australia. Geopolitically, Woodside emphasizes Browse's role in strengthening Australia's energy security and its position as a key Asia-Pacific gas supplier, while also contributing to the energy transition by providing natural gas as a lower-emission alternative to coal. The final federal approval decision for the project is anticipated in mid-2026."
