Browse financing questioned as banks restrict gas lending

Woodside says it has not decided how to finance the A$30 billion Browse gas development off WA's Kimberley coast, as bank restrictions prompt questions about funding for the project.

A company spokesman said design work was continuing and Browse still required state and federal regulatory approvals. Lending decisions rested with financiers, he said, and Woodside would not speculate about their choices.

ANZ's annual report said the bank would not directly fund new upstream gas developments or expansions, including associated LNG plants and pipelines dedicated to those projects. Commonwealth Bank and NAB also have policies limiting finance for new oil and gas extraction developments.

Elisa Leys, acting Tokyo office director at advocacy group Solutions for Climate, said fewer potential lenders could increase Browse's borrowing costs. Her group examined 42 banks that had financed the project's proponents during the past five years and found 13 could not provide project finance for Browse.

MST Financial oil and gas analyst Saul Kavonic offered a different assessment. He said Browse's participants were major international companies able to borrow overseas, including through government-backed facilities, making Australian bank lending less important. Woodside's partners include BP, Mitsui and Mitsubishi.

Kavonic also said higher gas prices following the US-Israeli war with Iran had renewed interest in Browse. Leys remained sceptical, pointing to the development's cost and high carbon content as further obstacles.