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Australia Defers Environmental Decision on Shell Gas Project on Election
Royal Dutch Shell Plc’s Prelude project became the third Australian natural gas venture this month to face delays in obtaining environmental approval as the country heads toward an election in three weeks.
The nation’s environment department extended a review of the Prelude development by two more months to Oct. 1, a document filed on its website shows. A decision on Shell’s plan to pioneer the use of a floating liquefied natural plant off the nation’s northwest coast had been expected by Environment Minister Peter Garrett today following a previous delay.
The minister earlier this month deferred decisions on two LNG ventures proposed by energy producers Santos Ltd. and BG Group Plc until Oct. 11, saying he needed more time to examine the “potentially significant environmental impacts.”
The Santos and BG projects in Queensland state are the first coal-seam gas-to-LNG developments to be evaluated by the government, a spokesman for Garrett said July 14. While the Queensland government cleared the plans, the state Coordinator- General Colin Jensen raised concerns the “significant” amount of water and salt extracted could pose environmental risks.
The environment department today cited the “caretaker” period leading to the Aug. 21 election as the reason for deferring a decision on the Prelude project. That’s when “major policy decisions” that could bind an incoming government must be avoided and “controversies” should be prevented, according to the website of the Australian prime minister and cabinet.
‘Complex Matters’
The review of Shell’s proposal has been extended until after that period “because decisions on these types of strategic and complex matters, where there are no clear precedents, must be made by the federal environment minister -- they cannot be delegated to the department,” the department said in e-mailed comments in response to questions.
Shell is on schedule to make a final investment decision on Prelude in early 2011, Claire Wilkinson, a Perth-based spokeswoman for Shell, said in e-mailed comments today. Studies show Prelude has a “very low overall environmental impact, and we look forward to hearing the minister’s comments.”
Santos and BG said earlier this month that they still expect to reach final investment decisions in 2010.
Shell may become the first to use floating LNG technology aimed at developing gas deposits too small or far from the coast to be profitably exploited through onshore plants. An investment decision on Prelude is due in 2011, Shell said in May.
To contact the reporter on this story: James Paton in Sydney at jpaton4@bloomberg.net
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