Unions have widened their campaign against Shell's plans for more floating LNG projects in Australia, saying the move would cost jobs and the Federal Government should slug petroleum giants higher royalties to discourage the massive offshore vessels.
The latest battle comes amid speculation Shell has begun shopping its 6.4 per cent equity stake in Chevron's Wheatstone project for fears it will suffer similar blowouts to the $52 billion Gorgon venture, amid exploding costs in WA.
Australian Workers Union WA secretary Stephen Price said FLNG, like modular overseas construction, was the latest in a worrying erosion of the amount of work given to local workshops.
He said the Federal Government needed to use its impending manufacturing taskforce report to provide more explicit support for local content, and disincentives for developing Australia's gas via huge FLNG vessels built overseas.
"Should a company choose FLNG rather than onshore processing, maybe the Government needs to look at increasing whatever royalty the companies have to pay as a disincentive for them doing that," Mr Price said.
Mr Price said FLNG may be suitable for extremely remote fields, but on projects such as Woodside's $40 billion Browse development, in which Shell is a partner, a line had to be drawn. This included potentially stripping the partners of their gas leases and warehousing the nation's finite resources. "If Australia isn't going to benefit from their development we need to be mindful of that," he said.
Shell's chief executive Peter Voser told British investors last week that exploding costs in WA would force the company to push FLNG over land-based processing.
But Mr Price rejected suggestions unions were to blame for the rising costs, saying wages were adequate given arduous remote working conditions, and companies like Chevron were more to blame from bungling logistics on its projects.
AMWU WA secretary Steve McCartney said both sides of politics had been weak on the issue but Federal Resources Minister Martin Ferguson should "grow a backbone" and stand up to companies.
Paul Howes, the AWU national secretary who was instrumental in delivering Prime Minister Julia Gillard to power, said the Government should encourage onshore processing. Ms Gillard and her minsters, including Mr Ferguson, have repeatedly declined to comment. Shell said its Prelude FLNG project would deliver 1000 jobs and billions in tax and local spending.
It would not comment on Wheatstone. But it swapped nearby interests in the Carnarvon Basin with Chevron last year, and is said to be concerned about Gorgon's high costs spilling into Wheatstone.