Debate erupts as Woodside walk away from LNG hub

Woodside’s decision to shelve its $40 billion Browse liquefied natural gas project has caused bitter dispute.

Indigenous elders say their communities have been betrayed, the WA government has blamed the unions and the industry is warning of higher domestic gas prices.

Jabirr Jabirr traditional owner Rita Augustine, said she was "really hurt" by the gas giant's decision to walk away for commercial reasons, the West Australian reported.

"I also feel let down by some of my people here in Broome and the outsiders who came in to protest against us," the 78-year-old elder said of the opposition to building the hub at nearby James Price Point.

The Goolarabooloo and Jabirr Jabirr people negotiated a 30-year $1.5 billion benefits package under the native title agreement that paved the way for the plant, a package which will now go off the table.

West Australian Premier Colin Barnett has described the situation as a tragedy for indigenous people.

A Woodside spokeswoman said the company had so far paid $3.7 million to Aboriginal organisations as part of the agreement, The Australian reported.

"We will sit down and review the agreement in line with our next steps in the evaluation of the Browse resources," the spokeswoman said.

While WA Treasurer Troy Buswell said "exorbitant, ridiculous" pay claims by the Maritime Union of Australia meant many perceived the state as a "high cost place to do business".

Many are tipping that Woodside will instead look to floating LNG technologies in offshore processing plants.

If this happens, the 15 per cent of gas that must be set aside for domestic use if the gas is processed onshore will be abolished, putting pressure on domestic gas prices.

Barnett has previously slammed the use of FLNG.

Barnett said FLNG would create greater safety and environmental risks than onshore developments.

"If the project is offshore, there's very few jobs for Australia, the whole structure will be built offshore, and indeed there'll be no gas coming onshore at all," he said. "That'd be a disastrous result for Australia and Australia's natural resources."

In a statement Woodside said the current development concept no longer meets the company’s commercial requirements for a positive final investment decision.

Located North of Broome in Western Australia, this project was planned to be larger then the North West Shelf which is currently Australia’s largest oil and gas development.

Late last year, Shell Australia chair Ann Pickard touted FLNG as the saviour of LNG development in Australia.

"We do see it as probably the potential saviour of the Australian LNG industry over the next decade or so."

“Australian LNG is the highest cost globally,” she said, stating that countries like the United States and Canada could export to Japan 20 per cent cheaper.

Image: watoday.com 

To keep up to date with Australian Mining, subscribe to our free email newsletters delivered straight to your inbox. Click here.