Andrew Probyn, Peter Kerr, Gareth Parker and AAP, The West AustralianUpdated April 12, 2013, 7:00 am
Woodside Petroleum has dumped plans for its controversial $45 billion liquefied natural gas project at James Price Point.
In an announcement to the ASX this morning, Woodside says it will review alternative ideas with its joint venture partners in the Browse project.
Woodside says the project "does not meet the company's commercial requirements for a positive investment decision".
The announcement was made before the Australian Securities Exchange opens.
It leaves the future of what was going to be one of Australia's biggest-ever resources projects in limbo.
Woodside says it will pursue "alternative browse development concepts".
Woodside said a major review of the proposed LNG processing plant, near Broome, had found it would not deliver the returns the company needed.
"Woodside will immediately engage with the Browse joint venture to recommend evaluation of other development concepts to commercialise the Browse resources, which could include floating technologies, a pipeline to existing LNG facilities in the Pilbara or a smaller onshore option at the proposed Browse LNG precinct near James Price Point,” the statement said.
The Federal Government is confident the Browse gas fields will still be developed despite Woodside pulling out of the project, frontbencher Stephen Conroy says.
Senator Conroy said although the Government was disappointed in the company's decision, there were still many other gas projects underway.
“We still believe that the Browse field will be developed, just in a different way,” he told Fairfax Radio.
Woodside received conditional planning approval from the WA Government last week to build a $120 million camp to house more than 850 fly-in, fly-out workers at the proposed gas hub.
The company recently said it was sticking to its June schedule for a final decision on building the onshore processing plant.
But analysts believe the proposal was not economically viable because of spiralling costs and challenges securing labour.
The Anglo-Dutch petroleum giant has in recent weeks been agitating for the gas field to be developed with its cutting-edge floating liquefied natural gas vessels in a bid to offset WA's spiralling construction costs.
Premier Colin Barnett has mounted an isolated campaign against the FLNG tankers, arguing that only a land-based solution at James Price Point would deliver the right mix of jobs and economic development to the State.
Others, including Federal Resources Minister Gary Gray, argue that FLNG could be an opportunity for Australia to form a high-tech jobs and skills base. Mr Barnett told parliamentary question time yesterday that the joint venture partners had until the end of June to make a final investment decision.
"I have continuous discussion with Woodside and it's not for me to comment publicly, particularly to market sensitive information on what decisions might be," he said.
Asked by Opposition Leader Mark McGowan yesterday if he had received advice in the past week from the joint venture partners that the project would not proceed, Mr Barnett said: "I have not received advice to that effect from the joint venture partners at all. At all."
Senior sources yesterday told The West Australian that the WA Government and Canberra had been informed by Woodside of its impending announcement.
James Price Point has been fiercely opposed by conservationists and is yet to be given environmental approval by the Federal Government. One of the sources said Woodside's decision was not the end of the environmental approvals process but "if the Browse Basin is to be developed, then the joint venture partners will have to use FLNG".
It is not clear how the development would affect the up to $1.5 billion indigenous social benefits and jobs package that was contingent on the land-based site proceeding.
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