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http://www.theaustralian.com.au/business/mining-energy/browse-on-track-for-new-lng-plan/story-e6frg9df-1226651692041


Browse on track for new LNG plan

by: Matt Chambers
From: The Australian
May 28, 2013 12:00AM


WOODSIDE Petroleum and its partners in the controversial Browse LNG project look set to declare they will pursue a floating LNG plant development.

The move follows last month's ditching of a plan to build a $50 billion-plus onshore plant at James Price Point near Broome.

Woodside now says onshore development of any scope does not look viable and chief executive Peter Coleman said the company hoped to pursue one or two floating LNG plants. This could be followed by approvals for other floating facilities.

Speaking on the sidelines of the Australian Petroleum and Exploration Association conference in Brisbane yesterday, Mr Coleman said floating LNG -- an option pushed by Browse partner Royal Dutch Shell but campaigned against by West Australian Premier Colin Barnett -- was now the only option Woodside thought could go ahead.

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"The joint venture is very aligned with moving ahead with earliest possible development," said Mr Coleman, who has previously declared floating LNG could be developed years ahead of an onshore venture.

Mr Coleman said the chances of onshore LNG plant development were slim, In contrast, Woodside last month said it remained an option, either through a small onshore plant at James Price Point or an expansion at Karratha.

"I struggle to see it's got legs," he said.

In the next couple of weeks, Woodside is expected to tell the federal and West Australian governments how much the abandoned plant at James Price Point would have cost and propose a way forward with the Browse site's retention lease.

Mr Coleman said this decision was not far off but would not involve selecting a concept.

He said he was very confident FLNG at Browse would be economic.

"The joint venture is aligning around a preferred option; each of the houses is going through its own valuation but it's going to be sooner rather than later," Mr Coleman said.

The initial final investment decision will probably be for one or two floating platforms.

"It allows us to manage our capital requirements much better because you are not hitting the market with tens of billions of dollars at once," he said.

"You come in, you do one; a couple of years later you come in and do another and a couple of years later you come in and do another."

Woodside and Shell signed an agreement this month to use Shell's floating LNG technology if the Browse fields were developed. Shell is building the world's first floating LNG project to develop the Prelude field off the WA coast at a cost of $US12bn ($12.4bn).

Woodside owns 31 per cent of Browse and Shell owns 27 per cent. The other partners are BP, Mitsubishi, Mitsui and BHP Billiton, which is in the process of selling its stake to PetroChina.

Mr Coleman said the agreement with Shell meant Woodside would continue to operate Browse as an FLNG project and that technology work would be maintained in Perth.

This will go some way to easing the concerns of Mr Barnett, who campaigned strongly for onshore development so WA could reap more benefits.

"It will be multiple vessels and will lead to many years of work and Perth has a real opportunity to create a technology hub for us in the professional area," Mr Coleman said.