Woodside gets nod for Browse delay

Peter Klinger, Business Editor, The West Australian

April 10, 2012, 8:41 am

The WA and Federal governments have approved a request by Woodside Petroleum and its four Browse LNG project partners to delay making a development decision for the controversial venture by up to one year.

Woodside, the operator and biggest shareholder in the Browse project, told the ASX this morning that it had received approval for amendments to the Browse Basin retention leases.

It did not spell out what those amendments were other than to declare that they included an extension of time, from the middle of this year to the first half of 2013, for the partners to be ready to make a final investment decision.

Woodside is in the throes of receiving firm tenders for offshore and land-based components of the mega project, and chief executive Peter Coleman has said the partners could not make a decision on whether the plan for an LNG processing plant at James Price Point, north of Broome, was viable until all tenders were in.

Apart from high-profile opposition from environmentalists and some sections of the Broome community, some of Woodside's partners are also opposed to the James Price Point plan, arguing privately it is too expensive.

The dissenting partners want to use the Browse Basin gas as backfill for the North West Shelf LNG venture, which would require a pipeline to be laid from off the Kimberley coast to the Burrup Peninsula.

The backfill option would be substantially cheaper than the James Price Point proposal, which analysts have tipped could cost more than $30 billion.

But it would also delay development of the Browse Basin fields by several years.

Woodside had refused to comment on the cost speculation, citing the ongoing tender process.

Woodside shares were off 86 cents, or 2.45 per cent, to $34.32 at 8.40am.