Located about 425 km off Western Australia’s northern coast, the Browse Basin was expected to be one of Australia’s next major LNG production provinces. Plans to produce up to 15.5 trillion cubic feet of dry gas and 417 million barrels of condensate have been put on hold however, by Australia’s Woodside Energy today.
The Browse LNG Development concept, a joint venture led by Woodside, is to commercialise the three gas and condensate fields, Brecknock, Calliance and Torosa, 425 km north off the Kimberley coast. Their plan was to deliver gas and liquids from these fields to an onshore LNG plant at the Western Australian Government’s Browse LNG Precinct, near James Price Point, 60 km north of Broome.
Following an extensive technical and commercial evaluation of the proposed Browse LNG Development, Woodside announced today that the development concept does not meet the company’s commercial requirements for a positive final investment decision.
At an estimated cost of $40 billion, this project would have employed a construction workforce of about 6000 people, and another 1500-2000 to install the offshore facilities, including three deepwater tensioned leg platforms (TLPs).
In an interview published on their website, Woodside CEO & Managing Director, Peter Coleman commented on other alternatives that are currently being considered.
“One of the alternative solutions is Floating LNG technology, and that is something we will recommend the joint venture consider as we move forward. There are other possibilities which we have looked at previously. We won’t pre-empt what we might put forward in our proposed work program and budget to the Joint Authority, but those other options could include a pipeline to existing facilities in the Pilbara and a smaller onshore option around James Price Point. It’s too early to say if any of those are commercial, but we need to get together as a joint venture to work out the way forward and then make our submission to the Joint Authority.”
The Maritime Union of Australia (MUA) isn’t too thrilled.
“Aside from the thousands of jobs that Australians would miss out on, the offshore option would also create the potential for environmental armageddon in the event of a leak or explosion,” MUA Deputy National Secretary Mick Doleman said.
“This new [Floating LNG] technology that Shell is trying to foist on the joint venture is untried and untested and could be catastrophic if something goes, such as a cyclone or a tsunami, particularly as it wouldn’t be crewed by professional seafarers with high-level safety qualifications.
“It’s not just workers that have a problem with offshoring – both the Coalition and Labor parties in WA oppose the idea on the legitimate grounds that it would be a bad move economically for the state.”
MUA WA Branch Secretary Chris Cain said the MUA is concerned that Woodside’s announcement was designed as a political measure to pressure politician’s into backing the company’s plans.
“We genuinely hope that Woodside is not try to use blackmail to pressure politicians to abandon their opposition to offshore LNG processing,” Mr Cain said.
“Any move to offshore the processing will be bitterly fought by unions, politicians and the community.
“It is the community that will suffer most from this proposal, as they will miss out on the benefits of royalties that are invested in essential infrastructure, as well as possibly seeing their gas prices affected.
“Locating a facility 200 kilometres offshore would cut out local workers, cut out local content, and cut out local laws. We’re not having a bar of it,” Mr Cain said.
Woodside CEO Peter Coleman reaffirms however, that the decision to cancel their plans off Australia was a purely commercial one, and not based on any public policy issues. “Woodside takes into account the desires of all key stakeholders in Browse and we believe that we have worked very collaboratively with the State and Federal governments and the local communities. However, I stress again that our decision is a commercial one. It is driven by commercial risk and reward considerations and the proposed concept doesn’t provide the economic return required to proceed with the project.”