* Australia grants Browse gas partners extension for final
* Browse project part of Australian plan to top Qatar in LNG
* Hurdles include environmental backlash over gas plant,
soft gas market
* Environment group says build it, just further down the
By James Regan
SYDNEY, April 10 Australia has given partners in
the Browse liquefied natural gas project off its western coast
more time to reach a final investment decision, as attempts are
made to end in-fighting and quell opposition from
environmentalists and landowners.
Australia has set a course of overtaking Qatar as the
world's top exporter of LNG later this decade. Browse is one of
a handful of LNG projects costing tens of billions of dollars
under evaluation in the country.
Australia's federal and Western Australian state governments
said on Tuesday each had approved amendments to so-called
retention leases for the Browse Basin where the gas is located,
which include extending the deadline for a final investment
decision until the first half of 2013 from mid-2012.
The project has been dogged by a dispute among the partners
-- Woodside Petroleum, Shell, BP,
Chevron, and BHP Billiton -- over the
best location to process the gas. There is also mounting
external opposition to building a gas processing plant at James
Price Point, which is favoured by Woodside.
"The variation will allow time to better evaluate the
outcomes of front-end engineering and design work and the
results of the tender processes for the development's major
contracts," Woodside said in a statement to the Australian
Fifty-percent partner Woodside in February said there were
bidders for a minority stake in the project and it hoped to
decide on a deal in the next few months.
China National Petroleum Corp, Japan's Osaka Gas Co
, Mitsui & Co and Taiwan's CPC Corp are among
bidders for the stake, sources with knowledge of a deal said at
A sale would help extract early value from the project,
which analysts have estimated could cost around A$30 billion.
But it also comes amid a softening in gas prices, which have
dropped by nearly a third so far this year.
The Australian Conservation Foundation (ACF) is battling
construction of a plant to process gas from the project along
the Kimberley coastline, a remote and environmentally sensitive
region in far northwestern Australia.
Environmentalists and some indigenous landowner groups want
the gas piped to other locations, which they say could include
areas around the existing North West Shelf gas hub further
"We're not against processing of the Browse gas but we think
the pristine Kimberley coastline is not the place for that to
happen," said Josh Meadows, an ACF spokesman. "There are
facilities that are viable elsewhere."
The state government has been locked in battle with
conservationists and indigenous residents over plans to
compulsorily acquire the James Price Point site.
Woodside has argued the development will inject much-needed
funds into the local economy, while those opposed claim the site
is culturally and environmentally significant.
The Browse project also is facing a pricey labour market as
well as a recently approved carbon tax. Analysts say the tax
should initially have only a minor impact on the bottom line of
new projects, but will inevitably erode profit margins,
particularly for projects with high carbon dioxide content in
the raw gas.
Japan's Inpex Corp in January signed around $70
billion worth of LNG sales and equity agreements from its
Ichthys project in Australia, laying the foundations for a final
investment decision on the project early next
Woodside dropped 1.4 percent to A$34.69, outpacing more
modest declines in the broader market.