Industry groups say the reservation policy adds unnecessary burdens on the project
Western Australia’s gas reservation policy has been applied to the Woodside Energy-led (ticker: WPL) Browse floating liquefied natural gas (FLNG) project, . The policy was started in 2006, and requires that petroleum projects reserve up to 15% of their production for domestic use, according to Practical Law.
The Australian Petroleum Production and Exploration Association said the state government should be looking to reduce the cost and regulatory burden on LNG projects if it wants to attract investment in the present economic environment.
“Western Australia’s domestic gas market is already well supplied into the future,” said APPEA spokesman Stedman Ellis. “The government needs to accept that its reservation policy simply adds to the capital costs of projects that are already facing growing global competition.”
The Browse LNG project is a joint venture between Woodside, Shell Australia (ticker: RDSA), BP Developments Australia (ticker: BP), Japan Australia LNG (MIMI Browse) and PetroChina International Investment (ticker: PTR), according to Woodside. The Browse Basin includes the Brecknock, Calliance and Torosa fields, and is estimated to contain gross contingent resources of 15.4 Tcf of dry gas and 453 million barrels of condensate. The Browse Basin is located approximately 425 kilometers north of Broome in Western Australia.
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