Premier Colin Barnett is pressing ahead with plans to acquire land at James Price Point for a gas processing precinct – without having a proponent lined up to build one.
Mr Barnett said today the acquisition was necessary to get the land “project-ready”, and foster the development of the offshore Browse Basin and Canning Basin gas fields.
The move comes despite Woodside Petroleum abandoning plans to develop a processing plant at James Price Point in April because of prohibitively high costs.
Woodside is currently pursuing floating processing technology to process the Browse gas with its joint venture partner, Royal Dutch Shell.
The land acquisition will provide $30 million in benefits to the traditional owners of the James Price Point site, the Goolarabooloo Jabirr Jabirr people.
The funds will be split between a $10 million economic development fund and $20 million will go towards indigenous housing.
“The precinct does not rely upon any single proponent,” Mr Barnett said.
“We are taking a long-term approach to developing the area for the future processing and export of natural gas.”
Mr Barnett said if the government did not act now to acquire the land, it could face substantial costs to renegotiate approvals.
“The gas is there and it is just a matter of time before it is used,” the premier said.
“We are being prudent about its development and aiming to ensure the maximum benefit will flow through to the people of Broome, the Kimberley and right across Western Australia.”
Mr Barnett's announcement follows the passing yesterday of legislation to pave the way for development of Canning Basin gas by Perth-based Buru Energy, in joint venture with Japan's Mitsubishi Corporation.
Buru and Mitsubishi plan to develop the onshore basin's gas reserves for the domestic market.
Mr Barnett said tapping the Canning Basin would guarantee domestic gas supplies for the state well into the future.
"The gas is owned entirely by the state government, and this agreement ensures gas discoveries are rapidly brought into production, and that before any gas is exported it is delivered to West Australians through the state's domestic gas network," Mr Barnett said.
Buru's plans, however, do not include processing the gas at James Price Point.
The company says, rather, that it will pipe the gas to Dampier, to feed into the Dampier to Bunbury gas pipeline.
The US Energy Information Agency has estimated that the Canning Basin could contain up to 229 trillion cubic feet of shale gas resources – almost double the state's known offshore gas reserves.
