Western AU to Seize Land for LNG Project

SYDNEY (Dow Jones Newswires), Sep. 2, 2010

Western Australia state said Thursday that it has begun a compulsory acquisition process for land planned for the massive Browse liquefied natural gas project, after talks with an indigenous land council failed to reach a deal by the latest deadline.

The Browse project is one of around a dozen planned Australian gas export projects slated for startup by 2016 that seek to tap a projected surge in demand for cleaner-burning fuels from Asia. The development, estimated by analysts to cost at least A$30 billion plans to exploit contingent natural gas reserves estimated at 13.3 trillion cubic feet.

As some Aboriginal representatives reacted angrily to the move, Western Australia Premier Colin Barnett said the project is in all stakeholders' interests. "Developing gas from the Browse Basin is critical for the development of this state, this nation and its indigenous people," the premier said in a statement, noting that the acquisition process will involve a six-month negotiation with native title claimants. If an agreement still can't be reached, the state will refer the matter to a tribunal for arbitration, which would take a further six months, he said.

The government and Woodside remain committed to delivering about $1.5 billion of social and economic benefits to local Aboriginal communities as part of the LNG precinct project, he added.

The Kimberley Land Council, an association of Aboriginal people in the region, and native title claimants were unable to reach a pact on land use with the state and project operator Woodside Petroleum by the most recent deadline--June 30. The state government said the deadline won't be extended a fourth time.

Native title is an Australian legal process that administers Aboriginal people's land rights.

The Kimberly Land Council wanted the Browse LNG development to move forward, but its negotiations with the government and Woodside stalled after divisions emerged between the Jabbir Jabbir and Goolarabooloo peoples.

Kimberly Land Council Chief Executive Wayne Bergmann said he was "absolutely disappointed" by the government's decision.

"Although there's been threats, this is by no means something that we can swallow," he told Dow Jones Newswires.

"The project can only happen, we believe, with the consent of the Aboriginal people," adding that the Kimberley Land Council was already well on its way to sorting out internal disputes, noting that the Federal Court recently rejected Goolarabooloo man Joseph Roe's challenge to the council's right to negotiate on behalf of claimants.

Mick Dodson, director of the National Centre for Indigenous Studies at the Australian National University, said the compulsory acquisition is a bad decision.

"What I say to the premier is be very careful about setting precedents like this. They can do more damage that you can ever imagine," Dodson told the Australian Broadcasting Corp. "I think compulsorily acquisition is, in a sense, another act of colonialism, it's another theft of our land, it's another invasion. It should never ever be contemplated at a political level."

In a statement, Woodside said Thursday that a compulsory acquisition would provide greater certainty for the development and that it remains committed to delivering benefits promised during discussions with the land council and native title claimants worth in excess of A$1 billion.

"The Browse LNG Development is on track to complete its A$1.25 billion work program between now and mid-2012, in order to be ready to make a final investment decision," Woodside said in a statement.

A Woodside spokesman declined to comment further.

The Australian and Western Australian governments last year threatened to strip Woodside and its Browse Basin partners of their gas retention leases if they didn't take a path that would monetize the gas resource as quickly as possible.

The decision was welcomed by Woodside, which wants the gas processed at the LNG processing hub, located at James Price Point on the Kimberly coast.

Woodside's partners--Chevron, BHP Billiton, Shell and BP--were considering more long-dated options for the gas, but were forced by the government to make a final investment decision on a gas development option by mid-2012 and spend A$1.25 billion between them on early works.

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