From Australia (LB): The Western Australian government has signed a Key Principles Agreement with the proponents of the Browse (SEN 32/5) flng project for the provision of domestic gas and to locate a supply chain in Western Australia.
It is the first time that the state’s domestic gas reservation policy would be applied to an flng project, and while Premier and State Development Minister Colin Barnett said the agreement would deliver benefits to the state in terms of domestic gas and opportunities for local businesses and workers, some industry leaders lamented the idea of imposing additional cost and complexity to lng projects in Australia.
According to the government, the agreement is expected to raise more than $1bn in royalties over the life of the project.
Under the agreement, the Browse Joint Venture partners, including operator Woodside Petroleum, Shell, BP, Japan Australia LNG and PetroChina, have committed to reserve gas equivalent to 15% 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,’ Barnett said.
In addition, the Browse Joint Venture has committed to the development of an integrated supply chain in Western Australia to provide port, marine, aviation, storage and transport services over the life of the project.
APPEA Western Region Chief Operating Officer Stedman Ellis said the decision to force projects to reserve gas for the state’s domestic market amounted to a de facto tax.
‘In what is now a new investment climate, the government should be looking to reduce the cost and regulatory burden on LNG projects if it wants to attract investment,’ Ellis said.
‘Instead, it continues to do the very opposite by imposing a gas reservation policy that simultaneously acts as a tax on gas production and a subsidy on gas consumption.’
Meanwhile, Woodside said it had received retention lease renewal offers for petroleum retention leases WA-28-R, WA-29-R, WA-30-R, WA-31-R, WA-32-R, TR/5 and R2, from the Commonwealth-Western Australia Offshore Petroleum Joint Authority and the WA Minister for Mines and Petroleum.
The company has 30 days to accept the retention lease renewal offers.
Recommended Reading
US Raises Crude Production Growth Forecast for 2024
2024-03-12 - U.S. crude oil production will rise by 260,000 bbl/d to 13.19 MMbbl/d this year, the EIA said in its Short-Term Energy Outlook.
Iraq to Seek Bids for Oil, Gas Contracts April 27
2024-04-18 - Iraq will auction 30 new oil and gas projects in two licensing rounds distributed across the country.
TotalEnergies Starts Production at Akpo West Offshore Nigeria
2024-02-07 - Subsea tieback expected to add 14,000 bbl/d of condensate by mid-year, and up to 4 MMcm/d of gas by 2028.
E&P Highlights: Feb. 5, 2024
2024-02-05 - Here’s a roundup of the latest E&P headlines, including an update on Enauta’s Atlanta Phase 1 project.
CNOOC’s Suizhong 36-1/Luda 5-2 Starts Production Offshore China
2024-02-05 - CNOOC plans 118 development wells in the shallow water project in the Bohai Sea — the largest secondary development and adjustment project offshore China.