Browse project binned

Ausprop said:
if only life was so grand - anyone that thinks it will be as simple and amicable as that and Con will just go and grab a beer instead is delusional
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Colin can do lots of things but he can't change the exchange rate.

Right now, if you were Woodside, would you rather:
a) Build a land based project with massive pipeline, dredging, civil works, etc etc etc with WA labour costs, union influence and contractors who have a long track record of delivering projects for around double of what they promised at the start.

OR

b) Build a complex Floating LNG project in shipyards across SE Asia using high quality and cheap labour and where you can have a high degree of confidence in the end cost of the product.

Some technical risk in the second option for sure but it pales into insignificance in the face of everything else.

Nearly every major project delivered or in feasibility in the last decade in WA has turned out waaaayyyy higher in cost than originally budgeted at the outset of development - far more than double the price in many cases. Think Citic Pacific, Crosslands, OPR, Southdown, Outer Harbour, Gorgon, Wheatstone, Roy Hill, Ravensthorpe, HBI, etc etc etc. The writing is on the wall for WA projects for that reason.

Sure, Shell is conflicted here but they have a fantastic ace up their sleeve right there. JPP is just another to add to the list. There's a reason Woodside hasn't published what they now know to be the cost of the JPP option - it would be too embarrassing for everyone to admit. They spent a lot of money and corporate firepower developing a project that we all could see from recent history was going to be horrendously expensive. Good on them for having a go but now they need to face reality.

Shades of the Tassie pulp mill debacle here - a huge fight with the Greens that they ultimately win but then can't commercially develop regardless. Although I'm confident the end result won't be the same - the resource will still be developed.
 
HiEquity said:
Right now, if you were Woodside, would you rather:
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the answer to that is easy, however the situation is a lot more complex. You have a WA that is pretty raw from a GST rip off (real or perceived), a destroyed labor party with a federal election looming and presumably an incoming liberal govt. To take the GST and gas royalties and jobs will make west aussies even more royally peed off than they are and I doubt Con will take it lying down and nor should the federal govt as whilst the fed govt may be better off, over all the nation wil be much poorer and we would be better to let someone else develop the project
 
Ausprop said:
we would be better to let someone else develop the project
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Quite possibly although Woodside still has exclusivity for a little while yet.

And the Federal govt still prefers JPP to floating LNG because there are more Australian jobs in it. However, I personally don't think anyone can afford to develop JPP today - it's just too expensive.

The only two real options that commercially exist today are:
- Floating LNG, in which case the Federal govt gets all the royalty benefit and hopefully distributes some to WA.
- Leave the gas in the ground for another day, when international gas prices rise sufficiently to justify JPP as a processing location.

I'm actually in two minds myself on which one of these is the better option overall for the country...
 
BTW, I loved this quote from Paul Howes today about the Greens:

"They're unofficial partners in this plan to sacrifice tens of thousands of Australian jobs at the altar of higher profits for Woodside and Shell executives across the globe," Mr Howes said.
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That's gotta hurt! :)
 
anyone who works in the construction industry with tier 1 contractors knows that they went on a recruitment binge in the UK over the last couple of years - particularly Leighton.

you can pick those engineers up pretty cheaply now ;)

anyone working in the industry will tell you mining is coming off the boil, we are seeing prices come down on our projects.
 
tambourineman said:
worth a read, this is first year uni economics

http://en.wikipedia.org/wiki/Price/wage_spiral

house prices are partly to blame. as I said before, its a vicious cycle, those house price gains you want to protect so preciously are part of the reason the wider economy suffers.

greed in places like port headland, Moranbah and Gladstone will eventually be their undoing.
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1st year economics perhaps, but nothing to do with house prices in karratha.

Firstly, some of the house price gains in Perth are due to: high incomes, lack of building thru the GFC, population growth to name a few

House prices do not dictate wages - that is seriously loopy logic. It's a form of reverse Keenism at best.

I wish greed could drive house prices up, unfortunately both buyers and sellers are greedy, so 1st year economics kicks in. The only real greed factor comes from government impost. If you take karratha for example, a lot of the house price there is tied up in state and federal taxes but most significantly local government requirements and building standards and codes. Landcorp requirements for new builds in karratha add 100's of thousands to the price tag because of the lovely design features they require.... like do we really need a cyclonically rated 4sqm external store room? the council made me put one in a new build and I put an outdoor chair in it, that's a pretty expensive cover.
 
For one group to win, another loses

Hopes die with gas hub decision

A highly respected Aboriginal woman who became the face of the pro-James Price Point gas hub lobby feels betrayed by Woodside, her own people and protesters who waged war on the project.

Jabirr Jabirr elder Rita Augustine, 78, was in tears yesterday as she spoke of feeling let down and deeply saddened that $1.5 billion in benefits from the project appeared lost to her people.

In 2011, Ms Augustine became an indigenous figurehead for the development when she signed an agreement on behalf of traditional owners with the State Government and Woodside after years of talks.

Last year she wrote to The West Australian and then Greens leader Bob Brown saying he was putting “dinosaur prints” above people by opposing the project.
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Continues
 
There are too many LNG projects in the pipeline. Good thing some of these are being shelved as these companies can now maintain a healthy balance sheet.
 
Deltaberry said:
There are too many LNG projects in the pipeline. Good thing some of these are being shelved as these companies can now maintain a healthy balance sheet.
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why should we care about the balance sheet of a chinese company operating in Africa?? or any other company? this is about royalties, jobs, the $1.5bn benefits package, energy security, energy cost / supply

this was interesting:

http://au.news.yahoo.com/thewest/fu...cle/16745274/no-guarantee-of-offshore-browse/


But Mr Barnett remains opposed to the offshore option and said Woodside and its joint venture partners should not make any assumptions.

The Premier said the environmental assessment was going to be “totally different” and could affect the outcome.

“Also, it should not be assumed that the retention of Commonwealth leases automatically means the same treatment of State leases,” he said.

“We will look at this project, if it goes offshore, if that’s what the proponents want, entirely from square one.”




I didn't realise that a third of the resource was on state land. I think Barnett will be playing a hard game from here.... he now has nothing to lose which is a dangerous position to put someone in.
 
Because it'll create a bubble. People will be employed briefly, land prices will go up briefly, lots of jobs for contractors briefly, credit cards are maxed out briefly, before it all explodes as these LNG facilities realise there isn't a market for so much supply and people living on borrowed time/credit will have to pay it all back through job losses, debt to the eyeballs, and jumping off the top of buildings (or LNG facilities).

Everything we aim to do should be economically sustainable, rather than fulfill a short-sighted economic gain.

And Chinese aren't actually that big an investor in LNG. The Americans and Europeans are. And our very own Woodside and Santos are heavily invested through various ventures such as NWS, Pluto, GLNG etc.

The fundamentals of LNG is oversupply, too many projects, and most of these won't get off the ground. Browse will be first victim. Barnett can sing all the rhetoric he likes but why would any one care if it's uneconomical to go ahead?
 
There has been a technological shift. Advances in fracking and horizontal drilling over in the US has meant their shale gas production has surged.

The US is tipped to be a net exporter of energy. They will also move their displaced coal production to our traditional markets resulting in less profits for our coal miners as prices are depressed.

It's competition that has made the present Browse project uneconomical using existing plans. They will be looking for a cheaper way to proceed as is happening with BHP and the Olympic Dam expansion.

The gas will still be there for when prices recover or technology shifts again. IIRC this field was discovered in the early 1970's.
 
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tell us all about what fracking does to the different water tables and seismic stability of an area.

go on....!?

no?

amazing....all this technology and no one can model what will happen.
 
HotRod said:
So 8000 jobs, indigenous jobs and $50Mpa for the next 30 years gone.

Meanwhile, the leftie greenies are hailing it as a great victory. :mad:
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This is more like it in the world of Green ~
 

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