SHELL has been blamed for upsetting Woodside Petroleum’s
plans for an onshore processing component at the Browse
LNG project in Western Australia but from what
Slugcatcher saw last week the killer blow came
from outside the Browse joint venture and was
delivered by ExxonMobil.
Without fanfare and through the simple lodging of a 79-page
document with the Australian government’s environment
department, the Australian arm of ExxonMobil set the clock
ticking on the country’s second floating LNG barge.
That, in turn, means gold-plated LNG projects, such as the $50 billion monster that is the Gorgon development and the proposed $40 billion Browse project, are effectively LNG dinosaurs even before they are operational.
FLNG is not only a cheaper option – it will be more profitable, flexible and far from the problems of trying to do business in the high-cost Australian domestic market, which also comes wrapped in union militancy.
For Woodside chief executive officer Peter Coleman there is the frustration of being seen to favour the onshore Browse LNG option while his old firm, ExxonMobil, signs up for a Prelude-like floater.
Coleman’s options are narrowing as the LNG market evolves and rivals invest in cheaper options than what he currently has.
That is unless he can steer the Browse partners and the WA government towards an even more profitable option than FLNG for Browse – a long pipeline to the Burrup processing centre.