Logistics News

MUA calls on Woodside to reject floating option

The Maritime Union of Australia puts its two cents worth into the Browse Liquefied Natural Gas (LNG) project debate

April 12, 2013

The Maritime Union of Australia has put its two cents worth into the Browse Liquefied Natural Gas (LNG) project debate.

The union says locating a floating LNG processing plant offshore would increase the potential for environmental damage and remove jobs for Australian workers.

“Locating a facility 200 kilometres offshore would cut out local workers, cut out local content, and cut out local laws,” says MUA WA Branch Secretary Chris Cain.

“We’re not having a bar of it,”
he says.

“Any move to offshore the processing will be bitterly fought by unions, politicians and the community.”

Cain is responding to the announcement today that Woodside Petroleum is considering other options to develop its $43 million LNG
processing facility
at James Price Point in the West Kimberly region north of Broome.

Australia’s largest standalone oil and gas company says the James
Price Point option isn’t commercially viable but that it would continue to explore options with its joint venture partners.

Woodside Petroleum CEO and Managing Director Peter Coleman says the decision to delay the project is the result of a technical and commercial evaluation, and was not based on public policy, environmental or administrative considerations.

The resource is located in deep, remote waters, has a high carbon dioxide content and would be technically difficult to extract.

While Coleman would not disclose the cost escalation associated with the Browse LNG project, he says the costs are “consistent with other projects in Australia.”

“Unfortunately the total costs for Browse have resulted in the current development concept not being commercial,” Coleman says.

The Browse LNG project has always been controversial, angering environmental groups and dividing the indigenous community which was to see a $1 billion contribution to local groups.

However it is backed by the state government, with Western Australia Premier Colin Barnett, publically stating his preference for an onshore option for the LNG processing facility because of the huge benefits to the economy.

The workforce needed during the construction phase was estimated to be 6000 onshore jobs and 2000 offshore.

Woodside says the key alternatives for the Browse Project include a “smaller” facility at James Price, or a pipeline to existing LNG facilities in the Pilbara such as Karratha.

However, the floating technology, proposed and developed by Browse joint venture partner Shell, which has a 27 percent interest in the project, is understood to be the most likely option.

Shell Australia Chair Ann Pickard tells The Australian newspaper the floating LNG technology is the fastest, most economic and best technical solution available for Browse.

The Australian reports Pickard as saying the floating option will bring long-term, sustainable jobs to WA, including employment and business opportunities for indigenous Australians.

But the MUA argues Shell’s new technology is untried and untested.

“It could be catastrophic if something goes wrong — such as a cyclone or a tsunami — particularly as it wouldn’t be crewed by professional seafarers with high-level safety qualifications,” says MUA Deputy National Secretary Mick Doleman.

“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,” Doleman says.

Coleman would not disclose the estimated savings each of the alternatives on the table might offer, or provide an updated timeline for delivery of LNG from Browse.

It has been speculated the possible delay could now be between five and seven years.

Woodside and its partners, which include Shell, BP, Mitsubishi, Mitsui and PetroChina, have until the middle of the year to make a final investment decision on the James Price Point option for Browse.

Woodside operates the East and West Browse joint ventures, has a 34 per cent equity interest in East Browse and 17 per cent in West Browse.

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