Pickard hits back at Barnett

SHELL’S Australian chair Ann Pickard has poured cold water on criticism from WA Premier Colin Barnett that the Prelude FLNG project will be of little benefit to Western Australians.
Pickard hits back at Barnett Pickard hits back at Barnett Pickard hits back at Barnett Pickard hits back at Barnett Pickard hits back at Barnett

Speaking at the Deep Offshore Technology conference in Perth yesterday, she said the Prelude LNG project would create $45 billion of GDP over the project's 20-year life span, while contributing $12 billion in taxes to national coffers.

Pickard also hit back at claims that few Australians would see work on the project.

"Prelude will create 1000 full-time jobs for the full lifetime of the project. There's no boom-and-bust construction work, but long-term employment," she said.

"Most of the people on Prelude will be Australians. By 2015, I expect to see double the workforce here in Perth from 400 to 800 people and a lot of those new people will be working on Prelude."

Barnett previously told ABC's Q&A program that he did not favour the FLNG route.

"If you think about it, not a single job in construction in Australia, not a single crew member on it for Australia … the two choices are floating LNG or develop at James Price Point," he said.

The state will also lose valuable royalties from having the gas processed onshore.

After today's presentation, Pickard was forced to fend off journalists' questions about the safety of the Prelude FLNG facility after concerns were raised by Barnett in this morning's media.

"No, I don't agree [that Prelude is environmentally unsafe]. It's designed around safety and safety is absolutely paramount … in the design, so obviously I disagree," she said.

"Prelude will have its seven wells drilled by the Clyde Boudreaux. The rig will swing over to Prelude in January and start drilling then.

"These are the first cappable wells for Australia."

Pickard also fended off the latest Browse speculation.

Shell, a partner in the Browse LNG development - which at this point is slated to be developed at James Price Point - has been particularly vocal about the virtues of FLNG for offshore field development, leading to speculation it was pushing for the development of Browse via an FLNG facility.

"Woodside in 2009 had retention lease terms put on it. Those retention lease terms in 2009 really could not consider floating, because FID hadn't been taken on the first one.

"So Woodside simply has to comply with the retention lease terms, so it's James Price Point for Browse right now," she said.

However, she continued to talk up FLNG.

"I think floating is an option for just about anything offshore Australia given the cost structure," she said.

Pickard tempered her enthusiasm for FLNG by telling the audience that onshore LNG still had a place.

But she reinforced her argument that Australia had become the most costly place to develop onshore LNG projects.

Australia's tax structure, combined with the high cost of labour and materials, all contributed to the problematic environment, she said.

That environment was in keen focus when observing the fortunes of the LNG projects at Gladstone in Queensland.

Shell has a joint venture with CNPC to develop the Arrow LNG project, which Pickard described as "well timed" given that a large construction force would have already been trained up by Bechtel for the other three LNG projects.

But Pickard would not give a firm guide on whether the JV would end up taking final investment decision.

"We've asked Arrow to be prepared for an FID around the end of this year, but they have an EIS they need to complete. At that point the shareholders of Shell and CNPC can decide the best way forward for that gas," she said.

She was also non-committal on the prospect of the project being rolled into one of the other projects on the Gladstone coast.

"We will absolutely co-operate with the other three should it make sense to do so," she said.

"Consolidation is still a question. Whether we end up working with one of the other three is still a question that needs to be answered."

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