Barnetts throwing a tanty over Browse. Not strictly Kar related,...

Barnetts throwing a tanty over Browse. Not strictly Kar related, but possible implications down the track.

Browse related article in The Australian today:


WEST Australian Premier Colin Barnett has warned Woodside Petroleum it may be unable to sell billions of dollars worth of gas from its planned Browse project because he will refuse to allow his state's share of the huge gas resource to be developed using floating LNG technology.

In an interview with The Australian, Mr Barnett denied his relationship with Woodside chairman Michael Chaney and chief executive Peter Coleman was strained in the wake of the company's move to abandon plans for a $40 billion-plus LNG plant at James Price Point in the Kimberley.

But the Premier was clearly angry with the decision by Woodside and its partners to develop the Browse gasfields using FLNG, along with Woodside's move this month to walk away from a $1.5bn benefits package signed with Kimberley indigenous groups.

"Woodside has had very little contact with the state government over the last couple of months," Mr Barnett said yesterday.

He said he believed the state had real leverage over the Browse project because it owned 30 per cent of the project's biggest gasfield known as Torosa -- a figure that is significantly higher than most industry estimates.

Most of the Browse gasfields, which cover seven leases and contain 15.9 trillion cubic feet of gas, are in commonwealth waters.

Former resources minister Gary Gray agreed to amend the commonwealth leases last month, which effectively paved the way for the Browse partners to adopt FLNG.

Mr Gray's replacement, Ian Macfarlane, has supported the move and is planning to travel to Perth soon to speak to Mr Barnett about fast-tracking the Browse project.

But Mr Barnett said yesterday he would refuse Woodside's requests to amend the two retention leases that cover WA's share of the gas, in a move he claimed could hinder the Browse joint venture's efforts to market any of the gas.

"At the moment I don't see how the Browse project could sell gas to an international customer because it doesn't have clear ownership of that gas," he said.

"It does on the commonwealth leases, but not on the state leases.

"We believe that is about 30 per cent of the Torosa field, or in other words about 15 per cent of the whole project -- that's not insignificant.

"Those retention leases run through until November 2014 and we are not intending to amend them."

Mr Barnett said he had told Woodside that he may reconsider his opposition to amending the leases if the company agreed to build a $2bn supply base for the project at James Price Point.

Woodside declined to comment on Mr Barnett's claims.

But Mr Coleman said at Woodside's half-year results briefing last month that the volumes of gas reserves under the state leases were "quite small" and he expected to receive support from the state government.

In the interview yesterday, Mr Barnett also lashed out at Woodside's decision to walk away from a $1.5bn native title deal with Kimberley indigenous people after deciding against a development at James Price Point, saying the state had been left "holding the baby".

"What irritates me about that is that we negotiated with the Aboriginal people and we reached agreement on the giving up of native title rights and the transfer of that land to the state," he said.

"And we are going ahead with that. The West Australian government is going to honour its commitment to the Aboriginal people.

"Woodside walked away and just left us holding the baby."

Mr Barnett said James Price Point could still be used for gas processing in future because gas from other Browse Basin fields would need to be processed onshore -- a suggestion that will anger environmentalists opposed to development in the Kimberley.

"While this is one project, the Browse gasfield is vast and yet greatly underexplored," Mr Barnett said.

"It's in the very early stages of development. It's probably where the Gulf of Mexico was 30 or 40 years ago in development. There's a lot of gas out there, there's a lot of oil and condensate out there.

"And I happen to be of the view that some of that needs to come onshore into Western Australia and Western Australia should share in the employment and even a supply base."

Mr Barnett repeated his claim that FLNG for Browse was unsafe because it would be used in a cyclone belt.

He said FLNG would also deprive the state and nation of jobs as well as domestic gas supplies.


Cheers,
Stevo