Woodside Petroleum will recommend Shell's floating LNG technology to its joint venture partners as the best option to develop the Browse project off Western Australia, the company said in a statement Tuesday.
"The selection of FLNG as the development concept requires the approval of the Browse joint venture participants before progressing through to the basis of design phase," the company said. "Woodside's decision follows the evaluation of alternative development concepts for Browse after the announcement in April this year not to proceed with the onshore development at James Price Point."
The other development concepts considered included construction of a pipeline to the existing Woodside-operated North West Shelf or Pluto LNG facilities near Karratha in Western Australia's Pilbara region, and a modified option for the James Price Point site, located in the Kimberley region.
Woodside CEO Peter Coleman said the review had resulted in the emergence of a "compelling case" for FLNG as the best option for early commercialization of the 15.5 Tcf of gas held in the Browse joint venture's Calliance, Brecknock and Torosa offshore fields. Woodside's partners in the Browse Basin fields are Shell, MIMI, PetroChina and BP.
The company announced in mid-April it was shelving the proposed 12 million mt/year Browse LNG project near James Price Point because it was too expensive. Woodside has never put a dollar value on the project, but some industry observers have speculated that it could have cost up to $100 billion
Any final investment decision on a floating LNG project is still around two years away, but sources have told Platts an FLNG facility could still be brought into production around 2018 -- the same time frame as the previously planned onshore processing facility.
Woodside's decision is the latest blow to Western Australian Premier Colin Barnett's long-held ambitions to create a gas processing hub or precinct at James Price Point. Woodside's Browse project was originally expected to be the foundation facility at the site, designed to be the processing point for all gas developed in the offshore Browse Basin.
In another setback, Western Australia's Chief Justice ruled Monday that three of the state environmental approvals for the James Price Point hub were invalid. The action was brought by the Wilderness Society in conjunction with traditional land owner Richard Hunter.
"The James Price Point gas pipe dream is now dead and buried," Wilderness Society Western Australia Campaign Manager Peter Robertson said in a statement. "Premier Colin Barnett must face facts, drop this unhealthy obsession and quit the compulsory [land] acquisition process [at James Price Point]," he added.
