James Price Point picked for LNG hub

The commercial viability of a liquefied natural gas hub in the Kimberley appears to rest on oil giants Woodside Petroleum and Inpex, as the state government selects James Price Point, 60 kilometres north of Broome, as its preferred site.

The government today heeded the recommendations of the Environmental Protection Authority, which last week said James Price Point presented the least risk to the surrounding environment.

The selection of the site comes some 18 months after the Northern Development Taskforce was set up to investigate possible areas for an LNG precinct, with over 40 locations considered.

Premier Colin Barnett said today the site selection provides certainty to Woodside and Inpex for the development of their LNG projects, located off the coast of Western Australia.

"The role of governmentt here is to secure a site, the role of the proponents is to develop the precinct," Mr Barnett told reporters at a media conference.

"One or two LNG projects can be established at the site.

"At the moment the candidates are Woodside's Browse project and the Inpex project."

Woodside is currently evaluating options for an LNG facility for its Browse Basin project, with the company not ruling out processing the gas near Karratha.

Woodside senior vice president of the Browse LNG development Betsy Donaghey said a decision by the company will be made after government talks with Indigenous people have been completed.

"I think the important thing to keep in mind is LNG plants are just hard to make happen," Ms Donaghey said.

"We have to focus now on every aspect of this decision from the economics to a potential commercial agreement with the traditional owners, to the environmental factors to the social factors.

"It will be a very complex decision going forward."

In September, Inpex chose Darwin ahead of WA for the construction of an LNG facility to process gas from its Ichthys field. The project is valued at $15 billion.

Mr Barnett said he hopes today's announcement will prompt Inpex to reconsider their decision.

"I'm sure they are watching this with great interest, there is no doubt that James Price Point is some 500 kilometres closer to their gas reserves," Mr Barnett told reporters today.

He added that he has been in constant contact with the Japanese company but would not reveal whether Inpex had made any comment to him about the James Price Point location.

Four sites were recommended by the state government and the Kimberley Land Council for the development of a LNG precinct, with North Head, Anjo Peninsula and Gourdon Bay included in the short list.

Mr Barnett had previously named North Head as his preferred site, saying the area had access to deep water and was suitable for construction.

However the EPA recommended against it, saying nearby settlements were likely to be affected by emissions and the facility was likely to impact whale calving.

The exact location of the LNG precinct at James Price Point has yet to be determined with engineering design work and a detailed environmental assessment yet to be launched.

Mr Barnett said the studies will start after negotiations with Indigenous people, which has been scheduled for completion by the end of March next year, as agreed to by both state and federal governments.

Mr Barnett added that should negotiations fail to each a successful conclusion by that time, the state will compulsorily acquire the land.

"At the end of the day, if [talks] ultimately fail, then the state will use its power to acquire that site," the Premier said.

"The state is not about taking away people's land entitlements... all the state it looking for is commercial security over the site.

"One option could well be that the state might lease the site, long-term, off indigenous people and that may allow for the preservation of native title."

Kimberley Land Council chief executive Wayne Bergmann said the announcement of a single site was premature, and that the three month timeline is rushed.

He also welcomed the federal government's funding of a facilitator to assist in negotiations Indigenous people, the state government and companies with an interest in the Browse Basin gas fields.

"This is a decision that will impact for decades and decades to come on the life and environment of the Kimberley, so to rush the decision for short-term political gain is a mistake," Mr Bergmann said.

"We look forward to working with the Federal Government on this issue, and trust that they realise the dangers in threatening Aboriginal people with compulsory acquisition."

Meantime the Conservation Council, along with other environmental lobby groups, have condemned the state government's site announcement, with a small rally taking place outside the Governor Stirling tower at the time of the media conference.

"The Premier's obsession with chasing the Inpex LNG project has blinded him to the absurdity of his rush to declare an LNG precinct in the Kimberley," Conservation Council director Piers Verstegen said.

"The gas has been in the ground for thousands of years and will stay there.

"There is no rush to name a site two days before Christmas."

In response to the growing concern of environmental groups, Mr Barnett said today the precinct will only require up to 2000 hectares of land out of a total 14,000 square kilometres available.

The Premier's announcement is below:

James Price Point, about 60 kilometres from Broome, has been chosen as the site for a liquefied natural gas (LNG) precinct in the Kimberley.

Premier and State Development Minister Colin Barnett said the exact location of the LNG precinct would be determined after full consideration of significant cultural, heritage and environmental values of the area and further technical feasibility studies.

The Premier made the announcement after a visit and inspection of the potential sites earlier this week and meetings with indigenous representatives, environmental groups and local government.

"After extensive consideration, James Price Point has been declared the location most likely to work best for the Kimberley community, for the environment, for industry and for Western Australia's future economic development," Mr Barnett said.

"This is a significant step forward; the site has still to undergo a full environmental impact assessment and more detailed technical and social impact studies, before a final approval is given.

"Nomination of James Price Point fulfils this Government's commitment to urgently identify a site on the Kimberley coast to stimulate WA's future growth."

Since 2007, more than 40 possible Kimberley sites were considered and four sites, including James Price Point, were short-listed in October 2008.

The Premier said the Government will now focus its energy on working with traditional owners to secure land tenure over the site and completing social impact assessments to ensure that the project can deliver the benefits it promises, without compromising the special character of Broome and the wider Kimberley region.

"Our aim is to acquire the site by consent. This could include restoring rights equivalent to native title over the site at the cessation of LNG processing. Compulsory acquisition of the land remains an option," Mr Barnett said.

"With respect to acquisition of the site area, the WA Government has agreed to a proposal by the Commonwealth to fund a facilitator to work with the key parties (WA Government, Woodside, indigenous interests and relevant Commonwealth agencies) towards a negotiated resolution to acquire the site.

"This process has a completion date of March 31, 2009, after which the State Government will begin land acquisition processes.

"WA appears to have lost one major project to Darwin because the previous Labor government could not make a decision to secure the $15billion Inpex project. I do not intend to lose another.

"I am confident that the Woodside Joint Venture partners will choose to use the precinct rather than pursue the option of piping gas 850 kilometres to the Burrup Peninsula, but ultimately that is a decision for industry.

"I am also hopeful that Inpex might reconsider a WA option, for either its Ichthys field or for future gas developments, provided we can provide certainty of tenure over the site."

Mr Barnett said the development could bring hundreds of jobs, millions of investment dollars and long-term economic diversification for Broome and the West Kimberley.

He said the James Price Point location provided a range of potential development sites along a 10km coastal strip and offered:

- flexibility in locating jetties and processing operations to meet heritage and environmental requirements
- ease of expansion for two, or more than two LNG processing operators should that be required during the life of the Browse basin gas field
- no settlement, homes or businesses within 20 kilometres of the proposed site

The area could easily accommodate a 1,000 to 2,000 hectare, buffered industrial estate, 300 to 400 kilometres from offshore gas producers in the Browse Basin. The Dampier Peninsula has a land area of 14,000 square kilometres.

The Dampier Peninsula coast from Broome to Cape Leveque is about 200 kilometres long - the equivalent of the distance between Perth and Bunbury.

The Browse Basin has proven reserves of 27.5 trillion cubic feet of gas (Tcf) and 600 million barrels of condensate. Gas reserves are estimated at 60 Tcf, making the area comparable to the North West Shelf in terms of prospectivity.

The site selection brings to a natural conclusion the work of the Northern Development Taskforce. Continuing consultation with interested parties will be led by the new Department of State Development which will come into being on January 1, 2009.

The Northern Development Taskforce started work on selecting a site for an LNG development in the Kimberley in June 2007. It has produced or commissioned at least 22 reports into environmental, indigenous and other issues surrounding the proposal.

There were also 243 written submissions on the site selection (shortlist) report plus 46 verbal submissions, a three day workshop in Broome in July and an Environmental Protection Authority report and other reports commissioned by the Commonwealth.