Australia's Woodside explores floating gas plant

Australian energy giant Woodside Petroleum said Tuesday it was mulling untested floating platform technology to forge ahead with its controversial Browse liquefied natural gas (LNG) project.

Woodside shelved the major gas export project, worth more than $40 billion, earlier this month after concluding a proposed onshore precinct at James Price Point north of Broome in Western Australia was not commercially viable.

But the resources titan said it had reached an agreement with Shell, one of its partners in the Browse joint venture, to explore use of its floating offshore LNG (FLNG) processing technology.

"The agreement provides a framework that would enable the Browse joint venture to progress FLNG as a development concept," Woodside said in a statement to the Australian stock exchange.

The firm's CEO, Peter Coleman, said a floating plant had "the potential to commercialise the Browse resources in the earliest possible timeframe".

"It also provides the opportunity for Western Australia to become an industrial, operational and technology centre for excellence for floating LNG worldwide," Coleman said.

Shell is pioneering the use of FLNG at its Prelude project in the Browse gas field off Australia's west coast, with construction of the massive world-first floating platform underway in South Korea and first gas expected in 2017.

Once complete the mammoth 600,000-tonne structure will be towed into place 200 kilometres (120 miles) offshore. It will contain five times the amount of steel used on the Sydney Harbour Bridge.

Shell has touted the revolutionary but as-yet untested technology as far less intensive than an onshore facility in terms of material, land and seabed area used.

Woodside's other partners, which include BP, Japanese consortium Mitsubishi and Mitsui, and PetroChina, will have to sign off on the FLNG concept before it can go to an final investment decision.

Australia is set to become the world's biggest LNG producer, with predictions it will overtake Qatar by 2020 as it unlocks reserves that could last more than a century targeting booming Asian demand.