Woodside FLNG push another blow for Barnett

By a staff reporter, with AAP

West Australian Premier Colin Barnett's push to keep the Browse gas project onshore has suffered another blow, with lead proponent Woodside Petroleum Ltd recommending a floating offshore project to its joint venture partners.

In a statement to the Australian Securities Exchange, Woodside recommended using floating LNG (FLNG) technology to commercialise the three Browse gas fields, which would involve its offshore development expertise alongside Shell’s FLNG technology.

The Perth-based oil and gas giant earlier this year indefinitely shelved plans to build a multi-user gas processing hub at James Price Point, north of Broome - despite having already cleared state environmental approval hurdles - saying it would consider other development scenarios including floating LNG.

Yesterday WA's Chief Justice Wayne Martin handed down his finding in a Supreme Court challenge to the environmental approval, deeming it unlawful.

The Wilderness Society and Goolarabooloo elder Richard Hunter had argued conflicts of interest in the Environmental Protection Authority assessment process resulted in just one EPA board member - chairman Paul Vogel - making the final decision.

They also said the state's then-environment minister Bill Marmion had erred by granting his approval despite the conflicts. Chief Justice Martin agreed with both arguments.

Today Woodside said it had resolved to recommend to its Browse joint venture participants - Japan's Mitsui, PetroChina, Shell and BP - to use floating LNG (FLNG) technology to commercialise the project's three gas fields.

"The selection of FLNG as the development concept requires the approval of the Browse Joint Venture participants before progressing through to the Basis of Design phase," Woodside said.

Other development concepts considered included a pipeline to existing facilities in the Pilbara and a modified option in the Kimberley.

Woodside chief executive officer Peter Coleman said it was pleasing that Woodside had been able to complete the evaluation of alternative development concepts quickly.

"Through this review, a compelling case has emerged for floating LNG as the best option for early commercialisation of the world-class Browse resource," he said.  

Shell is a leader in FLNG and is using the technology to develop its Prelude and Concerto gas fields off the coast of Western Australia.

Mr Barnett has repeatedly said he favoured an onshore project to floating LNG because it would bring more benefits to the state, including jobs.

He also has concerns about the safety of FLNG, specifically the logistics of evacuating the big purpose-built vessels far off the coast when cyclones hit.

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Opting for FLNG over onsure is a lost oportunity for Aust as it represents chasing the quick dollar (royalties) rather than long term development. A classic case of unintended consequences for the opponents of onshore processing.