Australia Aboriginal Groups Narrow Down Sites for LNG

By Angela Macdonald-Smith

Sept. 10 (Bloomberg) -- Aboriginal groups in Australia's far northwest released a short-list of four sites they are willing to consider for a liquefied natural gas production hub, omitting a location favored by Japan's Inpex Holdings Inc.

The move follows consultation with 14 groups that hold traditional rights over land in Western Australia's Kimberley region, the Kimberley Land Council, representing indigenous communities, said today in an e-mailed statement. It is part of a state-led process to select a single site for LNG production in the area to minimize the effect on the environment.

Woodside Petroleum Ltd., Royal Dutch Shell Plc and Tokyo- based Inpex are among companies proposing LNG export projects using gas from fields in the Browse Basin, off the undeveloped Kimberley coast. Western Australian Premier Alan Carpenter has said LNG plants can't be built in the Kimberley region without the consent and participation of local indigenous people.

``Traditional owners in these four areas are saying they are prepared to continue the consultation process towards choosing a final location for development,'' Wayne Bergmann, executive director of the Kimberley Land Council, said in the statement.

The four sites are Gourdon Bay, James Price Point and North Head near Broome in the western Kimberley and Anjo Peninsula in the north of the region. Three of the locations were among nine identified in June by the state government's Northern Development Taskforce as warranting further assessment for LNG.

Maret Islands

The land council's short-list omits the Maret Islands, the site favored by Inpex and partner Total SA for the proposed A$12 billion ($9.7 billion) Ichthys LNG project. The partners are also considering piping gas from Ichthys almost 1,000 kilometers east to an alternative site near Darwin amid opposition to the Maret Islands plan.

Sean Kildare, a spokesman for Inpex in Perth, couldn't be reached for comment.

Perth-based Woodside, operator of the Browse LNG venture, said it supports the state's site selection process and is waiting for the final choice to be made. The company expects to decide by the year-end whether to develop Browse gas through a project at the Kimberley hub or by piping the gas south to existing LNG projects on the Burrup Peninsula, said John Williams, a spokesman in Perth.

BHP Billiton Ltd., BP Plc, Chevron Corp. and Shell have stakes in Woodside's Browse venture. Shell said in April it may favor a floating LNG project for its Prelude field in the Browse Basin, to avoid having to build a pipeline or construct a plant in an undeveloped and environmentally sensitive region.

Economic Benefits

The Western Australian government said last month it should identify a site for the LNG complex by October. The development of gas reserves in the Browse Basin could yield A$20 billion ($16 billion) a year in revenue for more than 50 years, Bergmann said in April.

Indigenous groups need further information from government and gas companies and to negotiate ``ongoing economic benefits'' before they can grant consent for the construction of an LNG project, the council said.

LNG is natural gas that has been chilled to liquid form, reducing it to one-six-hundredth of its original volume at minus 161 degrees Celsius (minus 259 Fahrenheit), for transportation by ship to destinations not connected by pipeline. On arrival, it's turned back into gas for distribution to power plants, factories and households.

To contact the reporter on this story: Angela Macdonald-Smith in Sydney at amacdonaldsm@bloomberg.net