AUSTRALIA

RIP Kimberley LNG

HAVING prompted the Inpex-operated Ichthys LNG development to seriously consider processing its gas outside Western Australia, the State Government still has nothing to show as an alternative LNG hub. The taskforce assigned to find a site for the government-backed Kimberley LNG hub is already three months behind schedule and will fail to meet its first deadline, sources have told <i>PNN</i>.

RIP Kimberley LNG

The idea of a common-user LNG hub for Browse Basin gas fields was first raised last year by the WA Government, and received Federal Government backing early this year.

In February this year, the Federal and State Governments released a joint statement saying they would facilitate the development of a major Kimberley gas hub, and that companies wanting to use the new hub would have to deal with environmental approvals for their LNG trains and upstream operations, but would not have to deal with any such approvals for other infrastructure associated with the hub as this would already be in place.

The taskforce has begun assessing possible sites and is supposed to have a shortlist ready by the middle of this year and a preferred site selected by the end of year.

Apparently the survey of the four suggested hub locations has not yet begun and the taskforce is already three months behind in its work.

However, Northern Development Taskforce Secretariat chair Duncan Ord felt otherwise, insisting the taskforce was still on schedule.

"I think we are on the track with our process, which is to get a site by September this year," he told PNN.

"I think where people might be coming from, the minister (WA Minister for State Development Eric Ripper) in the early days said we would put out a shortlist of sites in March or thereabouts."

Ord said that while Gaffney, Cline and Associates had already completed the validation studies, the taskforce had agreed that "announcing potential sites while traditional owners were just getting up to speed about what an oil and gas project is, would be divisive and maybe frighten people".

He added the taskforce was confident that it was on target on its major deliverable, which is to go back to the Government and industry with a site and that an interim report would be released on July 3.

PNN also sought comment from the WA Department of Environment but received no reply on this matter.

Last year, WA Deputy Premier Eric Ripper said that it was likely that at least two LNG hubs would be built in the Browse Basin and one of these would be the Ichthys development on the Maret Islands off the Kimberley coast.

But following the entry of the new Federal Government into this issue, it became plain that there was no longer strong support at government level for a Marets LNG development.

It is believed that this was the trigger for Inpex to consider a Darwin-based liquefaction plant.

Many industry players fear that the process of choosing and approving a hub will not be completed for years and construction will begin too late to be of any use to prospective Browse Basin LNG developers.

The State and Federal Governments have said that no matter what site is selected, all West Kimberley Aboriginal groups will benefit. This is a laudable goal, but it raises the prospect of years of discussions with the region's indigenous communities.

The irony is that this could ensure there are only modest benefits from Browse gas developments to local Aboriginals.

By the time the Government's Kimberley gas hub is ready to go - sometime in the middle of the next decade - floating LNG and piping gas to Darwin could well be the preferred options for liquefying Browse gas.

This would ensure the Kimberley remains pristine and undeveloped, but it would also mean that the local Aborigines have a weak and narrow economic base.

Where now for Browse gas - see the August issue of Petroleum magazine, out in mid-July in time for SEAAOC

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