Premier renews attack on FLNG

Premier Colin Barnett has renewed his attack on Royal Dutch Shell's "unreliable" floating gas processing technology, claiming its susceptibility to cyclones is worrying customers in Asia.

In a remarkable intervention during Parliament's Question Time yesterday, Mr Barnett also showed he had refused to accept the loss of a land-based LNG hub at James Price Point. He issued a veiled threat that he would strip Woodside Petroleum and its Browse Basin partners of their State-based gas retention leases next year if they pursued FLNG.

The comments prompted a sharp response from Opposition Leader Mark McGowan, who said while he fervently wanted land-based gas processing, a conciliatory approach to negotiations with companies would produce better results and more jobs for WA.

Mr Barnett said that on his recent trip to Asia, major gas customers Mitsui, Mitsubishi and PetroChina had expressed their concerns about Shell's revolutionary technology. All three customers are equity partners in the Woodside-led Browse consortium but are yet to declare publicly how they want the gas to be developed.

Woodside wants to use Shell's proprietary FLNG vessels, the first of which is under construction as part of Shell's Prelude project development, for the Browse fields.

"I must say I sensed a bit of reluctance (about FLNG) on behalf of the customers," Mr Barnett said. "The issue is reliability of supply and FLNG is in a cyclone belt.

"There will be six cyclones a year on average coming through that area, and if a cyclone is anywhere in the vicinity it is necessary to decouple the (vessel) from the subsea technology. It is necessary to evacuate the crew of about 400, that will probably take about three days. When the cyclone has left it will take another three days to re-establish it." It is not the first time Mr Barnett has raised the spectre of accidents on the giant FLNG vessels. Last year he linked them to the oil spill in the Gulf of Mexico.

Woodside and Shell, which has in the past defended the safety of its technology, did not comment. Analysts say the vessels do not need to be decoupled from the seabed in storms, although LNG tankers cannot tie up and load gas during a cyclone, in line with practices for land-based plants. They also say the size of the crews would be closer to 120 people, rather than 400.

Mr McGowan said it was hypocritical of Mr Barnett to have supported the Prelude development in the past, and be attacking it now. Mr McGowan said allowing gas to be piped to existing facilities in Karratha should be explored.