* State wants floating LNG supply base onshore in West
* State wants some gas reserved for use onshore
* Floating LNG plan key to cut costs on $45 bln project
(Adds state premier's comments, Woodside view)
MELBOURNE, April 7 The Western Australian
government said it will only renew two leases in the Browse LNG
development if the partners set up a supply base onshore in the
state and set aside some gas for industrial use in the state.
The Browse LNG partners, led by Woodside Petroleum,
disappointed the state government last year by scrapping plans
to build a liquefied natural gas plant onshore, where the state
wanted it, and opting instead to pursue a floating LNG project
to cut costs.
The project, previously estimated at $45 billion, would add
to $200 billion in gas projects under construction in Australia.
"We accept the realism that this will be developed as
floating LNG," Barnett said on Monday at an industry conference.
Woodside and its partners Royal Dutch/Shell, BP Plc
, PetroChina, Mitsui & Co and
Mitsubishi Corp, aim to make a final investment
decision on a floating project in 2015, but several hurdles
"At this stage there is no alignment between the joint
venture nor is there alignment between the state and federal
governments," Barnett said, but he was optimistic that the
issues could be resolved.
About half the gas in Browse is in the two leases owned by
the state, while the rest of the gas is in seven leases owned by
the Australian government, Barnett said.
However Woodside has said that only 5 percent of the gas for
the project is in the state leases, suggesting that the partners
may be willing to relinquish those leases if they don't want to
meet the state's conditions set out on Monday.
"I'm sure those issues will be worked out one way or
another," Barnett said at the conference.
(Reporting by Sonali Paul; Editing by Richard Pullin)