16 May 2014
Graeme Powell and Sue Lannin
The discovery of three rocks off the Kimberley coast means Western Australia’s share of Woodside’s Browse gas field could jump from an estimated 5 per cent to 65 per cent.
The rocky outcrops discovered by Geoscience Australia are part of the North Scott Reef and are technically islands, which will prompt a redrawing of Western Australia’s maritime boundaries.
The discovery, which could result in more royalties and a greater say in how the gas is processed, has been welcomed by the State Government.
Mines Minister Bill Marmion said the find could give the state a greater say in several gas fields now deemed to be in Commonwealth waters.
“It’s a very exciting development and potentially a great windfall for the state,” he said.
“We believe it’s significant and we are now working closely with the Federal Government to determine WA’s share of the Browse field and it’s exact implications.
“The fact that all of a sudden more of the field is in Western Australia’s waters, all that gas from West Australian-owned land comes to Western Australia.”
WA Premier Colin Barnett said the Government had been vindicated by the latest discovery.
“It means Western Australia now has a very big say in this project, up until only a few months ago the Commonwealth was saying Western Australia only owns about five per cent of the gas, that was a try on, they were wrong, been caught out,” he said.
The proposed boundaries could affect up to one out of the three gas fields in the area.
The Browse LNG project is potentially bigger than the North West Shelf – Australia’s largest oil and gas development.
Mr Marmion said, however, he doubts the discovery will prompt the State Government to renew a push to have Woodside process the gas onshore at James Price Point in the Kimberley.
“The Premier has actually said that for this particular project floating LNG is probably already organised,” he said.
“What it may mean though is that there’s a stronger case for a supply base in Western Australia.”
For years, Mr Barnett pushed for the gas to be processed onshore north of Broome.
But Woodside abandoned that option last year as not viable, saying it could cost up to $80 billion, and it favours floating liquefied natural gas technology (FLNG).
Variation which allowed FLNG defended
Meanwhile, former federal resources minister Gary Gray has defended his decision to allow Woodside Petroleum to change its plans for the development of the Browse Basin gas fields off the WA coast.
A WA parliamentary committee yesterday criticised last year’s decision by the Federal Government which saw Mr Gray approve a variation of offshore leases, allowing Woodside to choose the technology it wanted to use to develop Browse.
The committee found the use of FLNG as an alternative to onshore processing “would negatively impact upon WA industry”.
Committee members criticised Mr Gray and said his variation of the retention leases cost thousands of WA jobs.
They also accused oil and gas companies of not acting in the interests of WA.
The committee wants the approval process to be investigated.
Mr Gray said he made the decision in the interests of the state and the country.
“Many people in Western Australia wanted one of the largest industrial facilities on the Kimberley coast,” he said.
“The investors determined that was uneconomic.
“And so as the federal minister I was placed in the position of making sure Western Australia, the Kimberley coast and Australia received the best possible benefit from this resource.”
Woodside Petroleum said it recognised the committee’s report and was reviewing the various recommendations.
The Maritime Union has backed the report’s findings, including that offshore gas processing technology will cost the state thousands of jobs.
The inquiry found that using FLNG technology to process offshore gas fields will create fewer jobs than onshore gas processing plants.
The committee said it wanted the WA Government to get legal advice on whether the federal approval was lawful.
Geoscience Australia, the Commonwealth geological survey agency, says it will work with WA authorities to finalise new maritime borders.
Geoscience Australia says its review of maritime borders will take another four years to complete.
The last major determination of coastal boundaries was in 2006.
Courtesy of ABC News