Golden rocks worth $5b to WA
Three tiny rocky outcrops discovered 300km off WA's north-west coast have become the world's most valuable real estate, worth at least $5 billion to State coffers in gas royalties.
Each no bigger than a dining table, their chance discovery on North Scott Reef during a satellite sweep of Australia's territorial seas last year has prompted a radical redrawing of maritime boundaries.
Though no more than 1m above sea level at high tide, they are considered "islands", meaning much of Scott Reef and nearby Seringapatam Reef belong to WA rather than the Commonwealth.
Crucially, the islands sit directly above the lucrative Torosa gas field that dominates the massive Browse resource.
Petroleum title legislation soon to be ratified by Federal Parliament with the unanimous support of the Government and Labor will confirm WA owns 65 per cent of Torosa.
Previously, it had been feared that WA owned as little as 5 per cent of the Browse resource, which comprises the Torosa, Calliance and Brecknock fields.
The State Government estimates WA's share of Browse will be about $2.5 billion in royalties but Federal Resources Minister Ian Macfarlane said yesterday that it was an "extraordinarily conservative, almost pessimistic" estimate.
The Commonwealth believes the changed boundaries will be worth at least $5 billion in State royalties over the life of the Browse project, assuming an oil price of $US50 a barrel.
Mr Macfarlane said he was confident the Woodside-led consortium would proceed with the Browse development using floating liquefied natural gas technology.
Woodside has signalled it will make a final investment decision by the middle of the year.
It could place an order for an FLNG platform made in South Korea within 12 months of the decision.
"This ultimately is going to be the biggest floating LNG project in the world, three times the size of Prelude," Mr Macfarlane said.
"There will be thousands of jobs for WA. The crews will be supplied from the shore. Along with the labour, there'll be food, provisions, repairs and maintenance for at least 25 years."
He said WA would become the world's centre for excellence in floating LNG.
Shadow resources minister Gary Gray said Browse FLNG would be a game changer.
"I don't think people in WA quite realise the gargantuan scale of this Browse project to the State's wealth, future and technical capacity," he said. "This is simply the most significant economic development for WA since the sanctioning of the North West Shelf project in the 1980s. It's more significant than Gorgon because Browse brings a raft of new technologies and new capabilities."
Premier Colin Barnett said the discovery of the so-called "golden rocks" meant WA's share of Browse gas would be much higher than previously thought but the exact division was under negotiation between the State and the Commonwealth.
"My advice is that WA is estimated to own about two-thirds of the Torosa field, which is the largest of the gas fields," he said. "That could mean increases in State royalty collections of up to $2.9 billion over the life of the Torosa field alone."
