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From "THe Australian" today:


Mining & Energy


Woodside lifts lid on Browse blowout

by:Matt Chambers
From:The Australian
June 10, 201312:00AM

THE Woodside Petroleum-led Browse liquefied natural gas project off the coast of Western Australia has revealed for the first time the capital cost of the controversial development at James Price Point in a formal declaration to the state and federal governments.

The five Browse partners have also requested that their retention lease on the big offshore gas fields in the Browse Basin be varied from a version pushed by former Woodside chief Don Voelte that committed them to studying onshore development at James Price Point, which is 60km north of Broome.

Neither Woodside nor the governments would comment on the details of a commercial viability report submitted by the Browse partners on Friday.

But speculation of a capital cost as high as $90bn to $100bn has been widespread, although it is unclear if this includes more than up-front costs. This is double the previous estimates for the project.

The estimate is believed to have been based on extrapolating known and expected cost blowouts at the $53bn Gorgon LNG project and the cost of building four big underwater gas compression stations, which would be required to move the gas through pipelines to shore.

If floating LNG plants are used, these compressors will not be required.

In April, Woodside announced that it believed a development at James Price Point would not be economic, but this is the first time its partners -- Shell, BP, Mitsubishi/Mitsui and PetroChina -- have formally agreed to jettison the concept.

"The commercial evaluation of the James Price Point development concept concluded that the economics of the development were not commercially viable," a spokeswoman said.

"The economic conclusions of the commercial viability evaluation are supported by each of the Browse joint venture participants."

Woodside chief executive Peter Coleman last month said the partners were close to agreeing that they would pursue a floating LNG plant development of Browse.

Federal Resources Minister Gary Gray yesterday said his government strongly supported development of the gas resources in the Browse Basin and cited floating LNG plants being considered by BHP Billiton and ExxonMobil for Scarborough and one at Crux by Nexus and Shell.

"We are very optimistic there will be a substantial development of gas resources from the Browse Basin," Mr Gray said.

Woodside's shares closed down 35c on Friday at $34.90, retracing significant gains in the past two months when the stock was trading above $38.50.