Browse FLNG JV, WA sign domestic gas supply deal

The Western Australian Government has signed an agreement with the proponents of the Browse FLNG project for the provision of domestic gas and to locate a supply chain in Western Australia.

Premier and State Development Minister Colin Barnett said this was the first time the State’s domestic gas policy would be applied to an FLNG project, according to a statement by Premier’s office on Tuesday.

“While the State Government would still prefer this project to be developed onshore, this agreement ensures that the project will deliver benefits to the State in terms of domestic gas and opportunities for local businesses and workers,” the Barnett said.

“It also clears the way for the extension of the retention leases covering the project fields, and provides the Browse Joint Venture with certainty as it heads towards the front-end engineering and design phase.”

Under the agreement, the joint venture has committed to reserve gas equivalent to 15 per cent of production from the State’s share of the Torosa reservoir, one of three gas fields that make up the project.

“The domestic gas obligation will coincide with first production from Torosa and amount to around 800 petajoules over the life of the project, helping to secure the State’s energy future,” according to Barnett.

In addition, the Browse JV has committed to the development of an integrated supply chain in WA to provide port, marine, aviation, storage and transport services over the life of the project.

“This supply chain will consist of a primary operations base in Perth, as well as support locations in the North-West,” Barnett said.

This agreement will form the basis of a detailed Development Agreement, to be finalised prior to the joint venture making its final investment decision, expected in 2016.

Woodside, as operator of the proposed Browse development, is progressing FLNG as the preferred development concept to commercialise the resources in the Browse Basin.

The Brecknock, Calliance and Torosa fields – collectively known as the Browse resources – are estimated to contain gross contingent resources of 15.4 Tcf of dry gas and 453 million barrels of condensate.

Beside Woodside, other Browse JV participants are Shell, BP, Japan Australia LNG (MIMI Browse), and PetroChina.

LNG World News Staff; Image: Woodside