Browse LNG to Be Processed Onshore?

Western Australian Premier Colin Barnett said he will lobby China and Japan and investors to drum up backing for the Browse liquefied natural gas project.

Western Australian Premier Colin Barnett said he intends to lobby Chinese and Japanese customers and investors to drum up backing for the onshore site for the $40 million Browse liquefied natural gas project if his Liberal-led government is re-elected.

Australia's Woodside Petroleum partners for Browse include Shell, PetroChina and Japan's Mitsubishi and Mitsui.

The Browse gas fields include the Torosa, Brecknock and Calliance discoveries, which are estimated to contain a combined contingent resource of about 13.3 trillion cubic feet of dry gas and 360 million barrels of condensate.

Barnett said he would push for the proposed onshore processing of Browse gas at the James Price Point on the Kimberley coast rather than an offshore facility.

"I will be dealing with the Chinese and Japanese as premier to ensure they support the development of gas onshore," Barnett was quoted as saying by the Financial Review in advance of elections Saturday.

"That is what the state government of Western Australia wants. It will be a factor in China."

Barnett argues that an offshore development for Browse would deprive the state of jobs and economic benefits.

The retention lease conditions of the Browse joint venture bind the group to making a decision on processing the gas through a plant at James Price Point before looking at other options, The Age newspaper reports.

"The first hurdle for us to get through is, is it commercially attractive to develop the Browse resource at James Price Point, period," Woodside Chief Executive Officer Peter Coleman told the Review.

"The bottom line is how do customers think about things," Coleman said. "Customers look at global portfolios. They look at supply sources and they look at who can supply them."

Shell, which increased its stake in the Browse project to 27 percent last year, has been pushing for the offshore alternative, with its floating natural gas processing technology, or FLNG, seen as a logical alternative to onshore processing of Browse gas.

Shell has already started construction on the world's first FLNG vessel to develop its Prelude field in the Browse Basin off Western Australia.

That vessel, Shell says, will be deployed in Australian waters 124 miles from the nearest point on the coast, where it will produce gas at sea, turn it into liquefied natural gas and then transfer it directly to the ships that will transport it to customers.

At 1,601 feet long and 243 feet wide, it will weigh more than 600,000 tons when fully equipped and its cargo tanks full.

"Shell is promoting FLNG and there may be some circumstances where that is appropriate," Barnett told the Review.

"But the Browse gas field is arguably Australia's most valuable natural resource right now. For Australia to contemplate its natural resources developed by offshore-constructed platforms is a ludicrous policy."