Woodside Petroleum’s chief executive said he is confident that a major gas field off the northwest Australian coast will be exploited despite the energy company yesterday shelving plans for a A$45 billion (US$47 billion) plant to process the gas for export.
Woodside said in a statement that it scratched plans to build a processing plant at James Price Point in the wild West Kimberley region of Western Australia state because “the proposed concept doesn’t provide the economic return required to proceed.”
Woodside will now begin talks with its joint venture partners, which include Shell Australia, about alternatives for the Browse gas field. Options include building a floating liquefied natural gas plant or piping the gas to existing LNG facilities to the southwest.
Woodside CEO Peter Coleman said the decision to dump the plan for James Price Point was the result of rising costs. Australia’s mining and natural gas boom has increased wages and pushed up the Australian dollar.
“We do believe that Browse will get developed,” he told reporters.
He said it could be another four or five years before an alternative was ready for final approval.