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Bloomberg: Inpex, Woodside Should Delay LNG Plans, Groups Say (Update1)

By Angela Macdonald-Smith

June 19 (Bloomberg) — Inpex Holdings Inc. and Woodside Petroleum Ltd. should delay plans for natural gas projects in Australia’s northwest until a coordinated plan is drawn up to minimize environmental effects, six lobby groups said.

The groups, including WWF-Australia, yesterday wrote to Western Australian Premier Alan Carpenter asking for the state to assess all likely gas projects in the Kimberley, in Australia’s far northwest, to draw up “the most acceptable options” for development. A gas-processing “hub” used by all ventures should be considered, they said in the letter that was e-mailed to Bloomberg.

Inpex, Japan’s largest oil explorer, and Total SA plan to build a A$10 billion ($8.4 billion) LNG plant on the uninhabited Maret Islands of the northwest coast to process gas from the Ichthys field. Woodside, Australia’s second-biggest oil and gas producer, is leading a A$21 billion venture proposing an LNG plant on Scott Reef, also off the Kimberley coast.

“We believe that it is inherently premature for any specific proposals for gas processing plants to be made in the absence of a rigorous regional assessment, developed with intensive community input and the best available information,” the groups said in the letter. “Current proposals put the cart before the horse.”

Australia’s northwest, which includes the Kimberley and Pilbara regions covering about 1 million square kilometers (386,000 square miles), is “one of the world’s last true wilderness areas,” Tourism Australia says on its Web site. Unlike the Pilbara, the Kimberley has no major oil and gas developments.

Protest Action

The six groups include Cultural Heritage & Environmental Advocacy for the Kimberley, the Conservation Council of Western Australia, Environs Kimberley, Kimberley Marine Tourism Association and The Wilderness Society. The groups held a protest at the Maret Islands last weekend to oppose the project.

Separately, the traditional Aboriginal landowners in the Kimberley region, which in April had lodged an appeal with the state government to stop Inpex’s land-clearing on the Maret Islands, reached an agreement with the Tokyo-based company to start negotiations on development consents.

“It’s a major step forward,” Wayne Bergmann, executive director of the Kimberley Land Council, said in a telephone interview from Broome. “We’re going to be having some formal sign-off ceremonies in the next couple of weeks on the proposed Maret Islands development site and a group of traditional owner representatives will also be traveling to Japan to meet the Inpex board.”

Indigenous Talks

The land council will seek commitments from Inpex on jobs and business opportunities for indigenous people and social impact studies as part of the development consent, which may take 12 months to 18 months to agree on, Bergmann said.

The land council is about to place an advertisement in newspapers inviting LNG developers to work with it on consents with traditional landowners for a gas project, Bergmann said. The group still favors a single LNG development site in the Kimberley, or at most two in “our worst-case scenario,” he said.

BP Plc, BHP Billiton Ltd., Chevron Corp and Woodside’s 34 percent shareholder Royal Dutch Shell Plc have stakes in Woodside’s Browse LNG project, which is intended to tap the Torosa, Brecknock and Calliance gas fields about 400 kilometers (249 miles) north-northwest of Broome.

The Browse LNG project may cost A$21.7 billion, JPMorgan Chase & Co. said in an April 19 report. Woodside, based in Perth, said in April it wants to start LNG production from the project by 2014.

“Aside from technical complexity we believe this project will face major environmental scrutiny and alignment between joint-venture partners may be difficult,” JPMorgan said.

Inpex said in March it wants to start LNG deliveries from Ichthys in late 2012.

LNG is natural gas chilled to liquid form for delivery by tanker to destinations not connected by pipeline. On delivery it is turned back into gaseous form and distributed to users such as power stations, households and factories.

To contact the reporter on this story: Angela Macdonald-Smith in Sydney at [email protected] .

Last Updated: June 19, 2007 02:06 EDT

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