Tony Abbott has urged Colin Barnett to embrace floating LNG technology for the Browse project, saying the overriding priority has to be securing multibillion-dollar investments.
In an interview with The Weekend West yesterday, the Prime Minister said he understood the Premier's reluctance to abandon the James Price Point gas hub concept but the economics of the project had to be respected.
"I think that it's very important that these projects go ahead," he said. "If the economics of these projects say they're doable with a floating platform but they're not doable with a land or partly land platform, well I think it's better to have them than to not have them.
"I absolutely appreciate Colin Barnett's position, though.
"It would be better for WA if Browse goes ahead with a land-based refinery. It would be better for WA if it happened that way but it would probably be better to get it as a floating development than not at all."
Woodside and its joint venture partners - Japan's Mitsui, PetroChina, Shell and BP - decided this year that processing LNG at James Price Point in the Kimberley was uneconomic and, instead, announced plans to pursue a floating LNG option.
But Mr Barnett, who was in Canberra yesterday for the Council of Australian Governments meeting, said he would not budge on his insistence of an onshore component to the Browse project.
He warned that WA controlled gas fields "right in the middle of Browse" and that there were "other companies queuing up to try to get access to that gas".
"It's not a threat, it's not a threat at all," he said, saying it was wrong for anyone to think he opposed floating LNG, given he supported Shell's Prelude project as well as ExxonMobil using the technology on its Scarborough field 220km off Exmouth.
"But what I've said to Shell and what I say to Woodside is we expect to see some gas come onshore for a domestic gas plant at a minimum and we would like to see James Price Point developed as a supply base."
The Federal Government claims WA owns as little as 4 per cent of the Browse resource but Mr Barnett said the State owned 15 per cent of the entire oil and gas reserve, including 30 per cent of the huge Torosa field.
In terms of a royalty split between the Commonwealth and the State, the difference between 4 per cent and 15 per cent would be many billions of dollars.
Mr Abbott said WA would become the world's centre of excellence for floating LNG technology.
Speaking on the eve of his 100th day as Prime Minister, which will be Monday, he said: "I am very satisfied that we have precisely kept commitments and we have run almost precisely to the advertised timetables."
Asked if he conceded his Government had made some missteps, he said: "There's been some things that have happened which are outside our control which inevitably posed some challenges, whether it be Indonesia, Holden, Qantas, whatever.
"So there's always stuff happening out there which impacts on the Government but I think everything has been handled as well as reasonably could be."