Thursday, May 9, 2013

Repeating the mistakes of JPP and lacking consultation and common sense

Federal Environment Minister Tony Burke has stopped the clock on the Commonwealth's environmental approval process for the James Price Point gas hub until he receives fresh details of any reworked State plans for the site.

The decision complicates the Barnett Government's attempt to rescue something from the wreckage of the decision by Woodside Petroleum and its joint venture partners to walk away from the controversial $40 billion land-based LNG hub, amid spiralling costs.

As part of this drive, Premier Colin Barnett yesterday reintroduced legislation into the WA Parliament to help develop massive gas reserves in the onshore Canning Basin, which are considered a possible Plan B for James Price Point-based exports.

Canning Basin development Bill introduced
  • Legislation will allow for the development of the Canning Basin gas
  • Domestic gas project the first priority
  • Will ensure gas supplies for State’s future energy needs
Western Australia has taken another important step in ensuring the development of the vast gas resources of the Canning Basin.

Premier and State Development Minister Colin Barnett said the vast onshore gas resources of Canning Basin would be developed under the provisions of a Bill read into State Parliament today.

Mr Barnett said the Bill ratified the Natural Gas (Canning Basin Joint Venture) Agreement signed by the State Government with joint venture partners, Buru Energy Limited and Mitsubishi Corporation.

“This legislation will bring about the continued exploration for natural gas in the remote Canning Basin, the development of a gas pipeline to the Pilbara and ensure Western Australian consumers have first use of any gas discovered,” he said.

The Premier said the US Energy Information Administration estimated the Canning Basin unconventional gas resources at about 229 trillion cubic feet - about one and a half times WA’s currently identified offshore resources. 

The Canning Basin covers 530,000 sq. km stretching from the coast between Port Hedland and Broome, to the State’s eastern border.

The gas resources in this arid area are located between two and four kilometres below the ground’s surface.

“Tapping this vast resource will guarantee Western Australia’s domestic gas supplies well into the future,” Mr Barnett said.

“Because this gas is located onshore, it is also entirely owned by the State Government.

“This agreement ensures gas discoveries are rapidly brought into production, and that gas is delivered to the State’s domestic gas network, before any is exported.”

Once the domestic gas project is under development, the agreement provides for potential future gas supply for gas export.

Natural gas provides about 50 per cent of the State’s domestic electricity generation, and contributes to the production of key resource exports including iron ore, alumina, base metals and gold.

“This will also ensure that future energy-intensive mining opportunities and other manufacturing industries will benefit considerably from an expansion of WA’s domestic gas supply sources,” the Premier said.

“Natural gas is also an ideal partner for the State’s growing renewable energy production as a back-up in times of adverse weather conditions and peak demand.”

The Premier said the agreement provided additional security of tenure for 17,000 sq. km (1.7 million hectares) covered by five exploration permits held by the joint venture. These permits anchor the joint venture’s Canning Basin Domestic Gas Project, with the agreement facilitating further targeted gas exploration in these permits and the development of a pipeline to transport gas south to existing industrial areas.

If commercially viable gas resources are discovered, by mid-2016 the partners will be required to submit a plan for construction of the domestic gas project, including a pipeline connecting to the existing State gas network in the Pilbara.

Under the agreement, the partners are still required to obtain relevant State and Commonwealth environmental, safety, Aboriginal heritage and Native Title approvals for their exploration, development and infrastructure proposals. 

          Fact File
  • The agreement, which is for an initial term of 25 years, with a possible 25 years extension, will:
    • encourage investment in a significant exploration and evaluation program to determine the technical and economic viability of the natural gas resources
    • enable the Government to set firm timetables for development of gas discoveries
    • ensure domestic gas production and delivery occurs before any gas is supplied for export
    • ensure an amount equivalent to 15% of any gas processed for export is reserved for domestic use
    • make available for sale related products such as ethane, propane, butane and condensate, for the possible manufacture of chemicals or use as transport fuel
    • defer relinquishment conditions of the Petroleum and Geothermal Energy Resources Act 1967 for five key permits
    • facilitate the development of pipelines and other infrastructure to deliver gas to the State’s domestic gas network
  • This Bill was also introduced to Parliament in November last year but lapsed with the prorogation
Premier’s office - 6552 5000


  1. They are repeating the mistakes of JPP and in more ways than one.


    Why did Shell go to Darwin for its supply base?
    Why did Inpex sign an agreement with Mermaid Marine in Broome for its supply base?

    Shell paid $25 million for a base at the Darwin wharf with all the companies they need to do business with close by.

    Inpex paid $20 million for Mermaid Marine to service them,Mermaid have yards at Broome wharf with all the companies they need to do business with close by.

    Just over 4 years ago Barnett received the report from Worley Parsons on the 4 sites for a supply base for the Browse Basin.

    Broome was first choice,(for the above reasons), and the last on the list as the most unsuitable location was James Price Point.

    Barnett will not be able to pay the massive sums involved in building a base at JPP.And given the above numbers no one is going to pay 100's of millions of dollars for a base at JPP.
    Certainly not when they can follow Shell and Inpex and pay $20+ million and have a base right next to all the companies,(Toll etc.),they have to do business with.


    This is why with the way Barnett and his sycophants are behaving Woodside will walk from Broome as no one here is serious about doing business.


    It's all about wounded egos and sour grapes.


    *Note : For more details on the supply base saga please refer to comments under "Woodside backs floating LNG..."
    and "Chaney says floating LNG...".


    As for building an export LNG plant at JPP the same lessons apply.

    At the rate Buru are going about 3+ holes a year it will take them 3,000 years to reach Domgas production and 50,000 years to get to exports.

    However if the stories are true and Buru need to get hold of a very big rig to get down to the oil and gas in the deep shale they have a massive problem.

    1/These rigs which can drill down and then horizontally for a total of around 4+ klms do not grow on trees and cost a fortune to hire.

    2/To reach say 5,000 wells in 20 years they would have to get hold of about 50 of these monsters!

    3/Compared to the Bakken Shale in the US it is said around 200,000 wells will need to be drilled in the Canning Basin.

    4/So to get to there and export in say 50 years the number of rigs required would be enough to drill 4,000 wells per year,so even if each rig drills 10 wells a year they would need 400 drilling rigs.

    5/They say they wont frac - this is pure bullsh*t - a water treatment plant for all the "produced water" would cost over a billion $'s and have to be trucked long distances to get there.

    6/So what is the REAL expected drilling program for the Canning?


    7/And when all this is done and Japan doesn't want so much gas because they have plenty of Methane Hydrates the JPP option will once again be too expensive and cheaper ways must be found or the project will perish.


    Buru and Barnett,(and some of the local community),are full of SH*T.


    1. By the time they are ready to export from JPP the sea levels would be too high to build there.

      Give up Barnett it's not going to happen.

      Not now not ever.

    2. Re the Worley Parsons report :

      Barnett looked at it and declared Broome as unsuitable because of it's tourist trade,JPP was for other things,BUT with much fanfare he announced Point Torment as the most suitable site for a supply base.

      (the 4th option,Derby Town Jetty,wasn't considered because of it being too close to the Fitzroy River)

      HOWEVER his grand plan came unstuck when he informed Inpex they would have to stump up the $750 million to build it - miles from anywhere in a very inhospitable location and absolutely no one and nothing there to service it - Barnett offered to build a road into there.

      Hard to say how this grand plan was received by the Japanese,did they fall about laughing or start screaming,"...he's mad get us out of there..."?

      INPEX in another rejection of Barnett's insane plans signed an agreement with Mermaid Marine in Broome for $20 million to service their Browse business.

      NOW Barnett expects the same from WOODSIDE,"...foot the bill for a supply base at JPP for $950 million* and I will pay the $30 million for the land and build a road into there..."Once again JPP is miles from anywhere there is no one and nothing there to service the base,all the companies they will need to do business with are located close to the Broome wharf.

      (*just a figure I plucked out of the air)

      Barnett has sent the state so deep into debt he may not be able to raise the money for the road!

      WOODSIDE of course will do a Shell and have a supply base in Darwin - it is highly unlikely Broome will get it's act together because of the JPP fixation - Shell paid $25 million for their Darwin base.

      ONCE again it is the case,(something Territorians have laughed about for a very long time),no one West of the NT border has a clue about doing business.

      No one is serious over in "Sandgroper" land - as usual!


    3. * note - I am guessing JPP will be way more expensive than Point Torment because of one simple fact - Point Torment is as far as I know a "mud and sludge" dredging operation.

      Where as JPP will be an extremely expensive "drill and blast" rock dredging operation.

      The difference in cost between the two is huge.

      The other main factor of course will be the relatively sheltered Point Torment vs the wide open Cyclone coast of JPP.

      Cyclones do not usually enter King Sound they tend to follow a course around the top of One Arm Point and then adopt a southerly course down past JPP.

  2. Another example of the glaring incompetence of Barnett and his sycophant following is the debacle,(yes another one!),of the "new" 250 tonne Terex crane the Broome Port has just purchased.


    (I must point out that these are just "heard around the Bar & BBQ" stories - but perhaps further investigation could prove them correct or even partly correct).


    The new crane is some months away from being serviceable due to missing bits and pieces and has to be signed off by Worksafe.

    There is some bad blood over this but the wharfs options are limited as the rumour is the crane was purchased from a Melbourne company part owned by Australias own "Teflon Don" none other than the Man himself Mick Gatto.

    To add insult to injury upon delivery and a detailed investigation the wharf have reportedly discovered that due to axle placings and carry weights of the crane it cannot negotiate the "jetty neck" as it will overload the jetty as it crosses the spaces between the cross bearers.

    If this wasn't bad enough complaints are rolling in about delays caused by a shortage of trucks to get gear on and off the wharf.

    It is not hard to see how an extension and upgrade to the jetty and wharf is needed now and some supply base add ons need to be incorporated into the $75 million + "tinnie launching plan".

    However don't expect too much from this mob as they all have their heads stuck up Barnetts ass and Barnetts ass is still stuck up at Prices Point.


    Woodside will walk.
    Bets anybody?


    1. It was the black 100 tonne crane that was purchased from Gatto.

      The info on the new 250 tonner is basically correct as it cannot travel onto the jetty or wharf and operate with anywhere near it's full load of counter - weights effectively making it worse than a 100 tonner.

      Very expensive blunders.

  3. Could it be the latest scandal at the Broome police station has been caused by Sutherland drooling over bashing "hippies" and "well heeled greenies" "blow ins" and "selfish people from Sydneys north shore"?

    A very bad example was set during the no gas campaign led by a blood thirsty Sutherland - Mick "Happiness is a warm Truncheon" Sutherland,hell bent on being promoted by Barnett no doubt.

    The scandal of the "Secret policemans other Xmas party" and now the Kevin Spratt like bashing of a man at the police station show a gross lack of discipline at the "Cop Shop".

    Once the genie is out of the bottle - it may not want to go back in!

  4. 1 klm = 3,280 feet
    2 klm = 6,560 feet

    Drill a hole 2 klms deep then go horizontal for a klm is a distance of 9,840 feet.

    So an average well in the Canning Basin is going to be about 10,000 feet to 13,000 feet.

    In 2011 the average well depth drilled in the US was about 6,800 feet.

    This was done using 1,739 rotary drill rigs.

    The US drilled 39,000 wells that year.

    Buru has a lot of work to do and the roads and infrastructure in the US is way above what is to be found in the Canning Basin.


    One thing for sure it will be a long time before the number of wells are a problem but what they do with the produced water will be a problem from day one.


    Watch out kids they keep it all hid....


  5. The fiasco rolls on...and on...

    Show me new plans, Minister tells State

    Federal Environment Minister Tony Burke has stopped the clock on the Commonwealth's environmental approval process for the James Price Point gas hub until he receives fresh details of any reworked State plans for the site.

    The decision complicates the Barnett Government's attempt to rescue something from the wreckage of the decision by Woodside Petroleum and its joint venture partners to walk away from the controversial $40 billion land-based LNG hub, amid spiralling costs.

    As part of this drive, Premier Colin Barnett yesterday reintroduced legislation into the WA Parliament to help develop massive gas reserves in the onshore Canning Basin, which are considered a possible Plan B for James Price Point-based exports.

    While not indicating a likely position on the gas hub, Mr Burke confirmed his hands were tied on finalising a Federal strategic assessment of the Kimberley region, and the JPP hub, until the WA Government provided more details in light of the recent decision by Woodside to favour floating processing of Browse gas.

    "The only proposal that has come to the Federal Government is from the Western Australian Government," Mr Burke said.

    "I'm waiting on formal advice from the Western Australian Government indicating how recent announcements change the proposals they have put to the Commonwealth."

    Mr Barnett issued a statement in response, saying that the State was "still seeking environmental approvals for the precinct and still intends to acquire the land".

    After Woodside's decision last month Mr Barnett said he was prepared to play hardball with retention leases covering the up to one-third share of the Browse field that sits in State waters.

    "It should not be assumed that the retention of Commonwealth leases automatically means the same treatment of State leases," Mr Barnett said at the time.

    Any delay to environmental approval, or in acquiring land, would complicate renegotiation of the retention leases that are due to expire at the end of next year.

    Also unclear is whether the joint venture partners will need to rework their obligations under the current retention leases including items such as exploration spending, given they have abandoned a land-based processing option but there is still 18 months of the leases to go.

    Woodside would only say: "We will engage with the joint venture participants and then discuss retention lease renewal options with Government at the appropriate time".

    Federal Resources Minister Gary Gray said he could not comment on lease conditions that were under consideration.
    The Conservation Council of WA attacked yesterday's legislation as repeating the mistakes of JPP and lacking consultation. As well as boosting shale gas exploration in the Canning, the legislation aims to pave the way for a pipeline for Buru Energy and Japan's Mitsubishi - potentially to James Price Point.




    Gerry Georgatos - Western Australia’s Canning Basin will soon be talked about as the next resources mining frontier. The James Price Point $40 billion gas hub proposal for all intents and purposes has been dumped but the State’s Premier, Colin Barnett, will pitch the extraction of natural gas from the Canning Basin as the way to go in the pursuit of State revenue. Most of the gas will be exported.

    The shale gas deposits of the Canning Basin are among the richest in the world.

    On Tuesday, Premier Barnett introduced a Parliamentary Bill seeking to develop the vast Canning resource. The Bill will formalise the agreement between the Government and the venture partners Buru Energy and Mitsubishi Corporation.


    .....But the Conservation Council of Western Australia (CCWA) alongside other environmental groups is concerned that shale gas may involve hydraulic fracturing (fracking) which has been shown to damage groundwater systems and pollute waters.

    Mitsubishi and Buru are not alone in the Canning Basin and other multinationals are keen to get involved. In February PetroChina secured part of the Canning Basin.

    The CCWA warned that the State Government could be repeating the mistakes it made with James Price Point by rushing into a major knew industrial gas fracking project in the Kimberley that risks what it argued as irreversible damage to the region.

    The CCWA that despite all the serious concerns about gas fracking that legislation has been introduced to Parliament that commits the State “to becoming a proponent of major gas fracking developments in the Kimberley.”

    CCWA Climate and Energy program manager Jamie Hanson said “this legislation is a red carpet welcome to industrialisation of some of the most precious parts of Western Australia.”

    “Shale gas fracking is a highly risky technology in which chemical cocktails are pumped at high pressures into gas bearing rock in order to crack them and release trapped gas. The process comes with severe risk to human health, groundwater, and the environment.”

    “A string of reports by leading international agencies have reiterated that the risks to water, health and environment of shale gas fracking are very high. Groundwater will be polluted as wells being to fail – as they do.”

    “Indeed, reports have shown that over half of gas wells fail inside 30 years, creating pathways for dangerous water pollution to contaminate groundwater.”

    “The legislation will open precious places like Roebuck Plains and the Fitzroy River valley region to irreversible damage by thousands of gas fracking wells.”

    “The introduction of this Bill pre-empts proper access and risks serious and ongoing conflict within both the Kimberley community, and more broadly in Western Australia,” said Mr Hanson.

    “No environmental assessment of gas fracking in the Kimberley has been conducted.”
    Without the assessments there is a risk that the Kimberley could “be turned into a polluted gas field.”

    “We urge the State Government to follow due process, including at a minimum conducting detailed assessment of the environmental impacts of gas fracking in the Kimberley.”