UPDATED: Energy industry insiders have speculated that Woodside Energy may well be on the verge of cutting WA out of its Browse gas development project by shipping gas to INPEX’s Darwin operation – a move that would see WA lose out again to the NT.

The Ichthys offshore platform is about 150km from Woodside’s Browse interests and is connected by an 890km pipeline to the LNG plant in Darwin.

Woodside has not made comment on the mounting rumors and has previously publicly stated it intends to send its Browse gas 900km south to the North West Shelf in the Pilbara.

As first reported in the West Australian, industry insiders say Woodside CEO Meg O’Neill is assessing the benefits of using the already established INPEX pipeline – a move, which if acted on, would likely infuriate the WA government, which wants Browse gas processed in the state and has allowed Woodside to roll over its retention leases to ensure that it is processed in WA.

WA famously lost out to the NT in attracting Japan’s $34 billion INPEX project in 2012.

The West Australian reported that Credit Suisse analyst Saul Kavonic said the Ichthys option for Woodside was a workable solution.

“Developing Browse via the neighbouring Ichthys infrastructure will result in drastically lower costs due to only requiring new pipeline a fraction of the length of taking the gas to North West Shelf, and the utilisation of far more modern infrastructure which also reduces costs and carbon intensity,” he told the paper.

“It also avoids dealing with all of the intractable North West Shelf Joint Venture dynamics.

“With Ichthys suffering reservoir challenges, exacerbated by Prelude sucking from the same milkshake, there could be an opening for Browse gas to be developed via Ichthys by the end of the decade, presenting perhaps the last market opening for a Browse development to occur.”

A Woodside spokeswoman played down the speculation, and told the NT Independent the company “remains committed” to seeing the product shipped through the North West Shelf concept under which the gas would be processed at the Karratha gas plant.

“We continue to progress commercial discussions and State and Commonwealth regulatory approvals in support of the Browse to North West Shelf development concept,” the spokeswoman said.

The Browse Gas Deposit

Browse is Australia’s largest undeveloped conventional gas deposit, and its exploitation has been a long-held ambition of successive WA state administrations since its discovery in 1967.

Former WA premier Colin Barnett lobbied Woodside hard to connect the gas to James Price Point, 50km north of Broome, and establish a new LNG terminal there, but the idea was abandoned due to cost concerns. Woodside also examined a floating alternative, but the economics did not add up.

Editor’s note: This story was updated to include comments from Woodside Energy