Shell and Barnett clash over floating gas plants

Western Australian Premier Colin Barnett has confirmed that Shell is pushing to develop the Browse gasfield through its floating liquefied natural gas solution, calling the plan ‘silly’.

Speaking at a conference in Perth yesterday, Barnett slammed the push by Shell to develop Browse via floating LNG technology saying it would mean less jobs and gas supplies for Australia, The Australian reported.

"We would be stark raving mad as a country not to have Australian participation in the development of Australian resources," he said.

The Browse LNG development plans to commercialise three offshore gas fields and deliver the product to the James Price Point project 60km north of Broome, with Barnett throwing his support behind the onshore processing plant.

Barnett said Shell had been pushing for a behind-the-scenes FLNG deal with its project partners including project operator Woodside Petroleum.

"It's pretty obvious that there's been some discussion within the joint venture about (FLNG)," Barnett said.

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."

However Shell has hit back at Barnett’s suggestions that FLNG is unsafe, arguing the technology is “the most cost-competitive solution” for new LNG projects in Australia.

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.

Pickard also defended the safety issues surrounding the use of FLNG.

"(FLNG) is designed around safety, safety is absolutely paramount. Protecting the environment, protecting people is absolutely paramount in the design,” she said.

However, Pickard declined to comment on whether Shell was pushing for Browse to be developed using the FLNG technology.

FLNG technology involves using the same components of a traditional land-based LNG plant onto a ship that sits directly above offshore gas fields.

The technology is being used for the first time at Shell’s Prelude gas field off northern Western Australia and allows for the development of gas fields considered too remote or too small to develop via traditional methods previously.

Debate has raged over the development of an LNG gas plant at James Price Point with protestors saying they want the gas processed offshore or piped to existing facilities in the Pilbara, and claim the area covering James Price Point is a pristine environment.

Environmentalists say the development will require clearing native vegetation home to endangered species, and disrupt a coastline used by migrating whales and endangered sea turtles.

The James Price Point project's partners include Woodside, Shell, BHP Billiton, BP, Mitsubishi and Mitsui.

Under current contracts the partners in the development, led by Woodside, need to be in a position on an agreed investment by the middle of next year.

Image: Adelaidenow

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