03/12/2009 - 12:56

Browse conditions "brilliant": Voelte

03/12/2009 - 12:56

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Woodside chief Don Voelte today welcomed the federal government's strict deadline for moving forward with development of the giant Browse gasfield as "brilliant" and "a shot in the arm" for the people of the Kimberley.

Browse conditions "brilliant": Voelte

Woodside chief Don Voelte today welcomed the federal government's strict deadline for moving forward with development of the giant Browse gasfield as "brilliant" and "a shot in the arm" for the people of the Kimberley.

Mr Voelte was overjoyed at the federal government's clear direction that utilising the planned LNG hub at James Price Point is effectively the only realistic option for timely development of the $30 billion-plus Browse venture.

"It's brilliant - whoever wrote this (ruling) knew what they were talking about," Mr Voelte told reporters. "They understand the business, they understand LNG, they understand what it takes to get to a (financial investment) decision, and none of it that we can see at this point goes against what we would call our own natural schedule."

While Woodside is an enthusiastic supporter of James Price Point and wants to sanction Browse by 2012, partners Shell, Chevron. BHP and BP have suggested piping gas to the North West Shelf to "backfill" an expected decline in output after 2020 maybe a better option.

But the federal and state governments yesterday gave the partners just 120 days to agree on using James Price Point, or identify a more feasible alternative that could see Browse developed more rapidly, as a condition of renewing the Browse permits. Thereafter, a financial investment decision is required by mid 2012.

"We don't know any (other) option that can meet that criteria at this time," Mr Voelte said.

"So we think this is a major shot in the arm for James Price Point, and that makes Woodside pretty pleased because of what we think we can do in the community up there."

Mr Voelte said the James Price Point option would enable the project to be developed by the middle of next decade, whereas backfilling the North West Shelf would delay meaningful production until "the end of the 2020s".

That was simply not good enough for Australia, and the indigenous communities of the the Kimberley in particular.

"The government has said 'wait a second, this gas has been found for 30 something years, the markets are available ... we have provided you a site at James Price Point, you've got all the pieces - why should we wait for 15 years for this gas to get developed'," he said.

"That's a heck of a lot of money for Australian citizens to wait for ... and it's also an opportunity that's lost at least for one generation of the indigenous community that really needs help right now."

The government's conditional renewal of the Brose gas permits also spells out key activities totalling $1.25 billion that must be undertaken by mid 2012.

Mr Voelte conceded key elements of those requirements appeared to have come from Woodside's own submission to government in July, when the partners were asked to submit their own views of the project.

Mr Voelte repeated past comments that Woodside would be happy to take on more than its 50 per cent stake in Browse if any of its other partners wished to sell out, and that its offers to do so remained on the table.

He added that the terms of the joint venture already included "remedies" to resolve any disagreement among the partners that could otherwise delay development.

However, he believed the ideal outcome was still for all other four partners to support the James Price Point development plan and stay with the project.

"I'd miss them if they didn't," he said. "At the end of the day, we create pretty good music with each other."

Chevron, Shell, BHP and BP are all yet to comment on the government's decision.

 

 

 


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