Browse LNG Project, Australia

The Browse LNG project is the latest LNG export facility being considered in Western Australia's north-west coast (425km north-west of Broome in Western Australia).

The facility will help in the distribution of gas from three gas fields – Torosa (discovered 1971), Brecknock (discovered 1979) and Calliance fields (discovered 2000), comprising the Browse gas fields of the Browse Basin (water depths of 35m to 700m). These fields have estimated reserves of 20 trillion cubic feet of gas and also 300 million barrels of condensate (with a field life of 40 years).

The Browse LNG project comprises the East and West Browse joint ventures operated by Woodside Energy. Although planning has been underway since 2006 a final decision about where to build the 10mtpa LNG facility will be made in mid to late 2009. The facility is expected to be online by 2013–2015. The shareholders in the Browse LNG project include Woodside (50%), BHP Billiton, BP, Chevron and Shell.

Browse supply contracts

In March 2008 the main shareholder in the project, Woodside Energy (50% shareholding) signed an agreement with CPC Corporation of Taiwan to supply A$45bn (2–3mtpa) of LNG from the Browse project (it has been forecast that Taiwan's gas demand will increase to 10.5mtpa by 2010).

Woodside also signed an agreement with PetroChina to supply 2mtpa of LNG from the Browse project. Negotiations have also been undertaken with PowerGas of Singapore to supply the new LNG terminal being constructed on Jurong Island. Woodside Energy is now seeking two more customers to take LNG from the new project.

To capitalise on the Browse investment, Woodside has also acquired two new exploration licenses for adjacent blocks.

LNG project

One of the proposals for the siting of the LNG liquefaction trains was as an offshore facility at the South Scott reef (Western Australia) and this possibility was investigated by Foster Wheeler Energy Ltd (a shareholder in the project) along with Worley Parsons Services Ltd (this option would be cheaper than a land-based facility as the gas fields are near the South Scott reef).

There were a great many considerations for this proposal beyond the technical including the rights of Indonesian fishermen on the reef and also the impact on the environment. Paul Moore, director of development for Woodside commented: "We are in the very early stages of screening and we believe that our offshore option is less costly than onshore and therefore would be more robust."

Land-based sites on the Dampier peninsular are also being considered and to examine this possibility a joint venture consisting of Technip, Chiyoda and Fluor (TCF) was awarded an engineering contract by Woodside Energy at the end of 2007.

Construction costs for the LNG terminal could be up to A$10bn.

Browse upstream development

Browse upstream development, which is Woodside's environmental assessment process, consists of a gas collection system and infrastructure to facilitate manufacture and transportation of natural gas and products from Torosa, Breaknock and Calliance gas fields.

Woodside had passed on a referral for Browse upstream development to the Commonwealth Department of Environment, Water, Heritage and the Arts (DEWHA).

Subsequent to compliance of the referral, the Commonwealth Minister for the Environment and Heritage set an environment impact statement (EIS) level of assessment on the project. Browse upstream development component does not include the location of the LNG facility and its infrastructure.

Feasible locations

Woodside, along with its Browse joint ventures associates, has assessed various options for the suitable location of the LNG processing facilities. The assessment has been done on an environmental, social, technical and economic basis.

Following the assessment process, two options are considered as most suitable. The two most favourable locations are the State Government's proposed LNG precinct in the James Price Point coastal area in Kimberly or present the Woodside operated facilities located near Karratha.

Agreement for Kimberly LNG precinct

In April 2009, Woodside entered into a an agreement regarding the establishment of the LNG precinct in the James Price Point area, north of Broome. The agreement has been signed between the State of Western Australia and the Kimberly Land Council.

After its conditions have been met, the agreement will be converted into an 'indigenous land use agreement', which will enable the state to secure land for the LNG precinct at James Price Point.