WA-371-P lies in shallow water about 450km northwest of Broome and is near the Ichthys/Brewster gas field, the company said.

Shell Australia chairman Tim Warren said the block could be a significant contributor to the supply of LNG to the Asia-Pacific market.

“The re-emergence of strong growth in Asia-Pacific LNG demand has prompted us to look again at acreage, where previously we would have been concerned about the commercial potential,” Warren said.

“Shell’s interests in Australia are very important to realising our regional and global growth aspirations for gas, and to sustaining our global LNG leadership position. Additional exploration is a pre-requisite to successfully sustaining this position, and at the same time enhancing our overall commitment to Australian gas.”

Shell will undertake seismic surveys for the first three years, including the reprocessing of a large 3D seismic grid and in-depth reservoir analysis, field development planning, and drilling 12 wells.

The company said significant potential existed for a further three-year program.

Operator Woodside is moving to develop a Browse Basin LNG hub that will become Australia's fifth major LNG development (after the North West Shelf, Gorgon, Darwin and the planned Pluto project).

While Woodside is the major stakeholder in the region (about 50% on an aggregate basis), other big players are also involved.

ChevronTexaco and BP PLC have about 16.75% each. Dutch/Shell Group and BHP Billiton have 8.375% each.