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WA must embrace FLNG opportunities

LNG Industry,

According to the Australian Petroleum Production & Exploration Association (APPEA), floating LNG technology has the potential to support Western Australia’s development as a major global energy producer.

By embracing innovation, WA can maximise local economic and employment opportunities, build international competitiveness, and attract the next wave of resource investment.

FLNG option

In response to the Economics and Industry Standing Committee report released today, APPEA’s COO Western Region, Stedman Ellis, commented: “The high cost of building major gas projects in Australia is one of our industry’s biggest challenges – FLNG provides an attractive development option for monetising offshore resources.

“We simply cannot afford to reject floating technology, because in some cases it may be the only viable means of developing some of our offshore gas.

“The Committee’s report acknowledges this reality and effectively challenges the State and Commonwealth governments and the oil and gas industry to work collaboratively to ensure that FLNG delivers maximum benefits to the state and the nation.”

Jobs and revenue

Ellis explained that just one FLNG vessel had the potential to deliver up to 1000 highly skilled, well-paid jobs and approximately AU$ 12 billion in tax revenue during its 25-year operating life.

The same project could also generate approximately AU$ 45 billion in economic activity and up to AU$ 200 million every year in maintenance and supply contracts for local companies.

Offshore developments

“Floating LNG will allow us to build on the success of this industry by allowing development of offshore gas fields that would otherwise not be commercially viable,” Ellis added.

“WA has the opportunity to become a world leader in this new technology through training, research and development and greater co-operation between industry and government.

“We need also to recognise the substantial opportunities available to the local services sector through FLNG’s long operations phase. If we don’t seize this opportunity, others will.”

Gas projects

Ellis said APPEA would need time to consider the committee’s 385-page report, which included 68 findings and 33 recommendations. However, he noted that gas reservation was the wrong approach and the Committee should pay attention to the recent warning from the independent Economic Regulation Authority that the policy threatened domestic energy security in WA by discouraging future investment in gas projects.

Ellis also cautioned against any changes to the retention lease framework that introduced sovereign or commercial risk or did not adequately consider the enormous time and cost associated with finding petroleum resources.


“The industry is currently spending more than AU$ 3 billion per annum on petroleum exploration in Australia – much of this would be put at risk through ill-considered changes to the acreage management system,” Ellis concluded.

Adapted from press release by Katie Woodward

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