PERTH (miningweekly.com) – A standing committee on the use of floating liquefied natural gas (FLNG) facilities in Western Australia has urged the state to embrace the technology, saying Western Australia was well positioned to take first-mover advantage of the technology and to become a centre of excellence.

The inquiry into the economic impact of FLNG operations on the Western Australian economy was launched in 2013, and heard submissions from a number of interested parties, after major Woodside chose the option to develop its three Browse gas fields.

The decision was much contested, with Premier Colin Barnett left fuming over the state government’s A$30-million investment to develop an on-shore facility for the Browse project.

The standing committee on Thursday reported that FLNG was a viable option to access the state’s massive petroleum reserves, much of which were located offshore.

However, the report expressed its concern on the impact that FLNG technology would have on the economy, in particular on the engineering and design, and fabrication and engineering sectors, as well as the construction and ancillary services sectors.

The committee recommended that the state government employ a state agreement with the project developers to ensure that local content was used in the fabrication of the FLNG operations, and that the Minister of Commerce review and amend the state’s local content policies to ensure their relevance to FLNG developments.

The report also recommended that the state government establish the James Price Point as a regional supply base, and approach the commonwealth government for infrastructure funding.

The Australian Petroleum Production and Exploration Association (Appea) on Thursday backed the report’s findings that FLNG had the potential to underpin Western Australia’s continued development as a major global energy producer.

Appea’s COO for the western region, Stedman Ellis said the high cost of building major gas projects in Australia was one of the industry’s biggest challenges, to which FLNG provided 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.”

Ellis pointed out that one FLNG vessel had the potential to deliver up to 1 000 highly skilled, well-paid jobs and about A$12-billion in tax revenue during its 25-year operating life.

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

“FLNG 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 said.