Floating LNG most viable, says Coleman

Woodside Petroleum chief Peter Coleman says the unproven floating LNG technology is shaping up to be the oil and gas industry's future, all but conceding that the high-cost environment means it has no other viable alternative to developing the Browse mega-project in WA.

But Mr Coleman said Woodside and technology provider Shell had not yet formally settled on FLNG as the way forward to Browse with the other joint-venture partners after the company scrapped the original $45 billion-plus development plans at James Price Point.

"I don't want to have them feel like in any way that we're negotiating outside process," he said in a briefing with reporters on the sidelines of the APPEA conference in Brisbane on Monday. "But I expect they'll come to resolution soon."

The lack of formal agreement with its joint venture partners means Woodside has not specified FLNG as the only option as it seeks to extend its retention lease. Mr Coleman said it would not delay the process, which is expected to be submitted within "weeks".

The spectacular rise in the original Browse development price-tag has come to typify the cost blow-outs in oil and gas out west.

But Mr Coleman said Woodside now had a target cost in mind for Browse and was designing the development plan. He said another cost blow-out rendering the project unviable was not an option.

He rejected suggestions that investors and other joint venture partners, which include BHP (which is selling its stake to PetroChina) should be wary of the as yet unproven nature of FLNG. He pointed out that Petronas, and ExxonMobil with BHP, had recently committed to FLNG for their respective projects.

Opposition energy spokesman Ian Macfarlane said floating LNG was not "optimal" given the states would miss out on "thousands of construction jobs" including career opportunities for local indigenous communities.

But Mr Coleman said the potential for a FLNG technology hub to be based in Perth far outweighed the construction jobs lost.

"And they're lasting jobs because that's a skill set you can export," he said.