Woodside Petroleum and its partners have decided not to go ahead with the construction of the $30bn Browse floating liquefied natural gas (LNG) project off Australia.

Despite finishing the engineering and design work for the project, Woodside has scrapped the project due to plunging gas prices.

The company said the significant progress made to enhance the project value has been offset by an extremely challenging external environment.

Woodside CEO Peter Coleman said: "The decision represents a disciplined approach to large-scale capital investment and is consistent with our requirements for a development concept to be commercially robust across a range of scenarios.

"Woodside remains committed to the earliest commercial development of the world-class Browse resources and to FLNG as the preferred solution, but the economic environment is not supportive of a major LNG investment at this time."

Asian LNG prices have slumped by 80% over the past two years, forcing many companies to shelve their investment plans.

Woodside will now work with its partners to prepare a new work program and budget to progress development activities on the Browse joint venture.

Royal Dutch Shell, PetroChina, and Japan Australia LNG are its partners in Browse project. Woodside’s participating interest in the Browse project is 30.6%.

Last month, Woodside had said that it reduced costs, increased facility capacity and reliability since entering front-end engineering and design (FEED) work, but the value enhancement delivered is mostly being offset by the current lower oil price environment.

Woodside will continue to focus on satisfying its work program commitments under the Browse retention leases. The Browse retention leases were renewed in 2015 and the current term of the leases ends in mid-2020.