Energy giant Woodside Petroleum will pursue a floating option for its shelved $50 billion Browse LNG project, despite speculation it may bring the gas onshore.
The oil and gas company scrapped its onshore gas plant development near Broome three years ago, in favour of a cheaper floating LNG (FLNG) option, and weak oil prices have now forced the company to put the FLNG project on hold.
Woodside's original development plan for Browse was to pipe gas from the offshore Browse Basin in north Western Australia to the company's North West Shelf gas plant at Karratha.
After the company's decision to indefinitely shelve the key FLNG growth project on Wednesday, some analysts believe development planning could turn full circle.
Woodside's North West Shelf has sufficient gas volumes to keep the facility at full capacity until around 2025, leaving the option open to pipe gas from the Browse Basin, UBS analyst Nik Burns said.
"The indefinite deferral of Browse FLNG may re-open discussions around bringing Browse gas back to North West Shelf, given the time advantage of standalone has been diminished," Mr Burns said.
Woodside chief executive Peter Coleman said the company remained committed to the earliest commercial development of the world class Browse resources, and to FLNG as the "preferred solution".
West Australian Premier Colin Barnett, who has championed the Browse development near Broome, said the prospect of piping gas to North West Shelf was not realistic.
"I'm disappointed that Woodside has basically shelved the project," Mr Barnett said.
Mr Barnett said a prospective Browse Basin development did not necessarily need to use FLNG technology, which was unproven.
Operators also need to be aware of severe cyclones going through the north west each year, he said.
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