LNG processing plant at James Price Point (AAP: Mike Gray/Environs Kimberley)
Woodside pulls the plug on James Price Point
Australia’s largest oil and gas company, Woodside Petroleum has confirmed it will shelve a controversial $45 billion project in Western Australia.
In its announcement to the Australian Securities Exchange, Woodside says the Browse LNG development at James Price Point, north of Broome, doesn’t meet the company’s commercial requirements for a positive final investment decision.
The project was potentially bigger than the North West Shelf, Australia’s largest oil and gas development.
Woodside says it will immediately engage with the Browse Joint Venture on the evaluation of other development concepts.
They could include a floating gas facility, a pipeline to existing LNG facilities in the Pilbara, or a smaller onshore option at the proposed Browse LNG Precinct near James Price Point.
Oil and gas analyst Alexis Clark says three LNG plants to service the coal seam gas industry are being built in Queensland, which pushed up the cost for Woodside.
He says new onshore LNG plants may not going ahead because of the cost inflation.
“When you’re building three large LNG plants at the one time, they’re all demanding the same labour and also the same capital input.
“All that demand happening at the one time has caused the cost inflation, so building up salaries, combined with a resources boom in other projects, have caused overall cost inflation in the Australian market.
Environment groups were concerned about sand dredging interferring with migrating humpback whales.
Businessman and environmentalist Geoffrey Cousins has been vocal in his opposition to the development.
He told Radio National’s Bush Telegraph that this decision does not mean the end of the development altogether.
“It’s a wonderful result for the environment,” he says.
“This was going to be the biggest non-government industrial project in the history of Australia, built in one of the last remaining wilderness areas in the world.
“So it was just entirely inappropriate, and from that point of view I’m delighted that it won’t go ahead at James Price Point.
“It may well go ahead, however, with the floating [gas
facility] option, and that would be terrific.”