Woodside abandons James Price Point gas hub

Woodside Petroleum has announced it will scrap its proposed 45 billion-dollar gas processing hub at James Price Point in the Browse Basin north of Broome in Western Australia.

The project had been expected to have employed thousands of Australian construction workers and engaged local manufacturing industries for years.

 

But the company says the project as it stands is not economically viable.

 

Amanda Cavill reports.

 

Woodside received conditional planning approval from the West Australian government this month to build a 120 million-dollar camp to house more than 850 fly-in fly-out workers at the proposed gas hub.

 

But Woodside now says a major review of the proposed liquefied natural gas (LNG) processing plant has found it would not deliver the returns the company needed to make it profitable.

 

Woodside Chief Executive Peter Coleman says the company is looking for other options to develop the gas field, and will continue to work with traditional owners in the Kimberley along the way.

 

"We'll continue to work with those communities up there so in fact you'll find that Woodside will maintain our office in Broome. We think that's a very important thing for us because we do believe that Browse will get developed, whether it's a James Price Point option or something else, I believe we need to maintain a presence in Broome. So we are disappointed for those groups but equally out of disappointment there will be opportunity."

 

There's been trenchant opposition to the Browse project from environmentalists, residents and businesses, as well as some traditional owners.

 

The first talks about the plan began in 2005 when the WA Labor Government announced it would invest in a gas hub in the Kimberley region.

 

The Woodside company came on board and began searching for a suitable site.

 

James Price Point was selected, but the move was not welcomed by many of the traditional owners, the Jabirr Jabirr and Goolarabooloo people, who were concerned about the impact on their lands.

 

The Kimberley Land Council was appointed to represent native title claimants and keep them informed throughout negotiations.

 

The State Government gave the Kimberley Land Council around $17 million to pay for the negotiating process, a move some have argued was bribery, placing excessive pressure on the Council to ensure traditional owners agreed to the gas hub.

 

A compensation package was put on the table, worth about $1.5 billion over the life of the project.

 

It included funding for new homes, economic development, jobs and education.

 

Traditional owners finally voted 60-40 in favour of the deal.

 

Mr Coleman says he's disappointed for the native title groups that were part of that agreement.

 

"Having said that, there's already been significant benefit to the communities up there not only through direct employment but also through the benefits package that's many millions of dollars even to this point in time. The native title owners have been compensated for the commitments we've made under the native title agreement."

 

However, a group of Broome residents opposed to the project still want the promised benefits delivered.

 

Nik Weavers, from the No Gas Campaign says the decision will cost jobs in the Broome area.

 

She's told the ABC the benefits the development was expected to help deliver in the region should be paid for anyway by the state and federal governments.

 

"A significant amount of that package is over 30 years. But part of the package will provide health, housing, education, training and skills opportunities and these are all things that a state and federal government should provide to the community. We would expect these kinds of services should be delivered to remote areas, just as they are currently delivered to metropolitan areas."

 

The federal government has been low-key in its reaction to the decision.

 

Prime Minister Julia Gillard says the investment phase of Australia's resources boom is yet to peak, despite Woodside's decision.

 

Ms Gillard says the company's choice to shelve the massive project does not relate to federal or state regulatory issues.

 

"This is a decision for Woodside. More generally when we look at our economy what we are continuing to see is strong investment in resources. We haven't seen the peak of the investment into resources yet. And we are yet to see the peak of the production phase."

 

Greens leader Senator Christine Milne has welcomed the decision, but says suggestions of smaller projects in the area are still cause for concern.



The Greens say the northwest coast should not be industrialised because of its environmental values, including a whale breeding ground and Aboriginal heritage sights.

 

However unions are not happy.

 

The Australian Manufacturing Workers' Union says it is a devastating blow for the local construction and manufacturing industries.



The union says as many as 8,000 construction jobs will be lost.



It has called on all levels of government to work to ensure onshore processing is a priority.






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