Colin Barnett says he "accepts the realism" that the Woodside Browse joint venture's massive gas fields off the Kimberley will be developed through floating LNG.
But the Premier told 3500 oil and gas executives at the opening of this year's Australian Petroleum Production & Exploration Association conference in Perth this morning he remained steadfast in ensuring the joint venture developed a supply base in WA and ensured a deal under which gas would end up in the domestic market.
Mr Barnett said they were his two conditions before agreeing to changes to two of the seven retention leases that cover the Browse fields and are controlled by the State. The Commonwealth has already agreed to changes to the five other retention leases to reflect that development would be floating, rather than land-based.
Mr Barnett said he did not blame the Woodside JV from "changing its mind" and dropping the James Price Point development option in favour of FLNG.
"But it does leave the government swinging a bit high and dry in this," Mr Barnett said.
"However, we move on and I accept the reality that the Browse JV will develop the fields through FLNG.
"For the State to renew the retention leases (we need) first, a supply base at a site in WA that the Government agrees to, and secondly, a supply of domestic gas however that is provided."
Mr Barnett also used his address to criticise the oil and gas industry for losing the public battle, not just in Queensland and New South Wales because of community opposition to coal seam gas and fracking, but also in WA.
And he added that the industry needed to remember to be aligned with governments.
"Your industry is technically superb," the Premier said. "But I don't know if you have your public positioning right."