Browse partners choose gas hub

Woodside Petroleum CEO Don Voelte this afternoon said he is 95 per cent confident Woodside's Browse project will go ahead after the project's joint venture partners agreed on James Price Point as the location to process the gas from the Browse Basin fields.

The decision satisfies a condition of the retention of several leases, which the partners accepted last year after an ultimatum was delivered in December by both federal and state governments giving the partners 120 days to reach an agreement.

Mr Voelte said Woodside and the joint venture partners have made the agreement "50 days in advance" to the expiration of the government's ultimatum and they are "very happy to reach it early".

The Browse project's massive gas reserves, estimated at over 15 trillion cubic feet of gas, have been held under such retention leases since their discovery in the early 1970s.

"Today is the second best day for Browse, the first being the day we found gas" Mr Voelte said.

Operator Woodside had previously flagged its preference for the James Price Point location while the other partners were understood to be leaning towards existing infrastructure at the North West Shelf.

Other partners in the joint venture include Chevron, Royal Dutch Shell, BHP Billiton and BP.

Mr Voelte said today that the next phase of development will be basis of design, followed by front end engineering and design in 2011 which will enable a final investment decision by mid-2012.

The work will require an expenditure of $1.25 billion, as outlined by the federal and state governments.

CCI's chief economist John Nicalaou today said "unlocking the enormous resource wealth off the Kimberley coast will inject billions of dollars into the local economy and further showcase to the world out potential as a global resource hub".

Commenting on WA's strategic plan for development, Mr Nicolaou said today's announcement increases the need for more government support in order for the local economy to realise its full potential.

The announcement is below:

Woodside advises that the Browse Joint Venture has selected the Western Australian Government's Browse LNG Precinct at James Price Point, 60km north of Broome, as the location to process gas from the venture's Browse Basin gas fields.

This decision satisfies a condition of retention leases WA-28-R, WA-29-R, WA-30-R, WA-31-R, WA-32-R, TR/5 and R 2 to select a development concept within 120 days, effective 2 December 2009. The Browse LNG Development has now completed the development concept phase.

The next phase of the development will be Basis of Design, followed by Front End Engineering and Design in 2011 to enable a Final Investment Decision by mid-2012. This material work program to mid-2012 requires an expenditure of $1.25 billion. A Final Investment Decision for the development will be subject to necessary approvals and consents.