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Mr Gray was appointed to the portfolio following Friday's resignation of Martin Ferguson, but quickly discovered on Monday that assumptions about some of his policy preferences were firmly entrenched.
Mr Gray was forced to immediately play down suggestions that he would campaign for offshore development of the Browse gas project, which is being developed in the Kimberley by Woodside Petroleum, Royal Dutch Shell and smaller joint venture partners from Japan and China.
Approvals granted by state and federal governments require the gas hub to be constructed at the environmentally sensitive James Price Point near Broome, but the companies involved - particularly Shell - are understood to want to process the gas using a modern floating vessel.
Mr Gray was recently reported as supporting Shell's offshore ambitions when he praised Australia's oil and gas industry for enthusiastically adopting technological developments like floating LNG processing and coal seam gas production.
Speaking to Fairfax Media on Monday, Mr Gray stressed the comments were not meant to be interpreted as support for offshore development of Browse.
But when asked to clarify which option he preferred for Browse, Mr Gray was non-committal.
"I will be the decision-maker on the extension lease for James Price Point and consequently it just isn't appropriate for me to comment specifically on that project and on the Browse development," he said.
Mr Gray's ambiguous stance on Browse is at odds with WA Premier Colin Barnett, who has insisted that he will not support the project unless the processing hub is built onshore.
The issue is likely to flare again in coming months, as the joint venture partners make a final investment decision on the onshore concept.
The notion that Shell might be the beneficiary of Mr Gray's appointment to the position of Resources Minister is ironic, given he is widely credited with stifling Shell's attempts to takeover Woodside in 2001.
Woodside hired Mr Gray to help lobby the Howard government into disallowing the takeover on national interest grounds.
Mr Gray succeeded, and spent the next six years with Woodside before entering federal Parliament as the member for Brand in 2007.
Frequently Asked Questions about this Article…
The Browse LNG project is a proposed A$30 billion gas development in the Kimberley region near Broome. The joint venture includes Woodside Petroleum, Royal Dutch Shell and smaller partners from Japan and China. Government approvals currently require a processing hub at James Price Point onshore.
Approvals granted by state and federal governments specify an onshore processing hub at James Price Point, but some partners — particularly Shell — prefer modern floating LNG processing offshore. That tension between approved onshore plans and industry interest in floating vessels is the core of the debate.
Gary Gray is Australia's new Resources Minister (appointed after Martin Ferguson's resignation). As minister he will be the decision-maker on the extension lease for James Price Point, meaning he has a key role in approving whether the onshore option proceeds.
No. Although Mr Gray has praised technological developments such as floating LNG, he publicly played down suggestions that he would campaign for offshore development of Browse. He stressed those comments weren't meant to signal support for moving Browse offshore and said it wasn't appropriate to comment publicly on a project where he will make the lease decision.
WA Premier Colin Barnett has been clear that he will not support the Browse project unless the processing hub is built onshore. His stance is at odds with any push for offshore processing and could complicate approvals and the final investment decision.
Everyday investors should watch the joint venture partners' final investment decision on the onshore concept, the Resources Minister's decision on the James Price Point extension lease, and public statements from Woodside, Shell and the WA government — all of which could affect project timing and approvals.
The article notes an ironic history: Gary Gray is widely credited with helping to block Shell's 2001 takeover attempt of Woodside. He was hired by Woodside to lobby the government against the takeover, succeeded, then spent six years with Woodside before entering federal parliament in 2007.
Ambiguous public stances — such as the minister's non-committal comments and differing positions between federal and WA governments — can create uncertainty around project approvals and timing. Investors monitoring Woodside, Shell or other JV partners should track regulatory decisions, lease outcomes and the partners' final investment decision on the Browse development.
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