Logistics News

Woodside goes with the offshore option for Browse

Woodside Petroleum recommends Shell's Floating LNG technology as the preferred option for commercialising the Browse gas fields in WA

August 20, 2013

Woodside Petroleum today recommended Shell’s Floating LNG technology (FLNG)
as the
preferred option to commercialise three Browse gas fields in Western Australia.

This will involve processing and piping
the LNG 200 kilometres from offshore rather than utilising onshore facilities at James Price Point in the West Kimberly region north of Broome as previously planned.

Australia’s largest standalone oil and gas company has been considering other options to develop its $43 million LNG processing facility.

In April Woodside pronounced the James Price Point option “commercially unviable” but said it would explore other options with the project’s joint venture partners.

Woodside CEO Peter Coleman says other development concepts considered included a pipeline to existing smaller facilities in the Pilbara and a modified option in the Kimberley.

However, he says following review, a compelling case has emerged for the floating option given the pressing case for early development of the “world class resource”.

“It is pleasing that
Woodside has been able to complete the evaluation of alternative development concepts quickly,” Coleman says.

While Coleman would not disclose the cost escalation associated with the Browse LNG project, it is likely the desire to minimise losses is partially behind the quick decision.

The delay
to the project had earlier been tipped to be least five to seven years.

Meanwhile
the Maritime Union of Australia (MUA), which opposes the offshore option, blasted the decision claiming it will undermine employment opportunities.

MUA Assistant National Secretary Ian Bray says Woodside and its joint venture partners do not care about supporting the Australian economy and jobs.

“Positioning the facility 200 kilometres away from our coast will cut out local workers, cut out local content and cut out local laws,” Bray says.

“All the unions in this industry – the MUA, AWU and AMWU – are strongly opposed to the offshoring of the processing site on the basis of safety, employment and environmental concerns,” he says.

Woodside’s partners
include Shell, BP, Mitsubishi, Mitsui and PetroChina.

Woodside, which
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.

The selection of the FLNG option requires the approval of the Browse Joint Venture participants before progressing through to the “Basis of Design phase”.

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