Browse gas project given State Government approval

Browse gas project given State Government approval

Posted on Monday, November 19 2012 at 4:39 PM

A multi-billion dollar gas project given State Government approval in Western Australia could benefit the Broome and Perth property markets, according to Gavin Hegney of Hegney Property Group.

The $30 billion
project, which will see gas pumped from the Browse gas field in the Kimberleys
to a processing hub at James Price Point 60 kilometres north of Broome, has
been given environmental approval by the WA Government.

WA Environment
Minister Bill Marmion says the $30 billion Browse liquefied natural gas (LNG)
project now has the green light, following consultation with a number of other
ministers and authorities.

The project had
previously been appealed, but Marmion says a review of the Environmental
Protection Authority’s report allowed him to implement 29 ‘strict conditions’
to better protect the environment.

The Federal
Government still has to finalise the environmental and heritage assessment,
however Hegney says the latest step is a positive one for the WA economy and
will also be a positive for Broome “because of the intensity of labour that’s
required to construct a project of this magnitude”.

“People should
view it not so much as an LNG project, but more like a construction project,”
Hegney says.

“A lot of people
will be required to build it and it will be good for Broome. The Broome market
has tended to be a tourism economy but at the moment Broome is suffering.

“This will put
more money into the Broome economy.”

So what does this
mean for investors? Hegney says whether or not investors should actually buy in
Broome comes down to their appetite for risk. Of course, it would also be wise
to wait for federal approval, he says, but the news is likely to drive more
demand and could see prices increase in the short term.

Broome also has
adequate land to cater for an increase in demand, Hegney warns.

“It doesn’t
justify taking on the extra risk of investing in Broome, rather than a capital
city,” Hegney says.

“That doesn’t
mean people won’t make money short term, because people will buy into the
story. This is good for investors already in the market. But does it justify
stepping into the market? I don’t think so.”

Hegney adds when
it comes to LNG projects, the ratio of people required to build it compared to
the ratio of people needed to run it is about 15 or 20 to just one person.

This means when a
project goes from construction to operation, investors could find their
investment property suddenly falls in price.

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