Woodside Petroleum's (ASX: WPL) goal to develop a processing plant for its Browse Basin LNG reserves have swung once more towards a floating LNG (FLNG) option. This comes after the environmental approval given to build an onshore LNG plant at James Price Point was ruled unlawful by Western Australia's chief justice.
The Associated Press has reported that the approval awarded to the onshore processing option, which was strongly supported by WA Premier Colin Barnett, was invalid because conflicts of interest by Environmental Protection Agency (EPA) board members meant only one member made the final decision.
Woodside's exploration permits in the Browse Basin give the company access to nearly 16 trillion cubic feet (tcf) of natural gas able to be converted into LNG. However estimated costs of up to $45 billion for an onshore processing plant have pushed the company to look at more affordable alternatives, in particular FLNG.
Woodside hopes to use floating technology, developed by joint venture partner Shell, to process and export gas to nearby Asian markets without building pipelines to route the gas onshore.
Floating technology may also become the key to the production plans of other operators in the Browse Basin including Santos (ASX: STO).
Foolish takeaway
According to Peter Robertson of The Wilderness Society, the legal ruling means hopes for an onshore project are now "dead and buried". This places focus squarely on FLNG as the foremost alternative viable option for Woodside.
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Motley Fool contributor Regan Pearson does not own shares in any companies mentioned in this article.
