Global oil and gas heavyweight BP is keeping tight-lipped about whether it wants the controversial Browse gas project built onshore, or offshore using floating technology.
BP is a joint venture partner in Woodside's $40 billion Browse project in Western Australia, with partners, BHP Billiton, Shell, Mitsubishi and Mitsui.
The partners will decide in June whether it's economically viable to bring gas ashore at James Price Point, near Broome.
While Royal Dutch Shell angles towards developing the project offshore using floating technology, BP group chief economist Christof Ruhl will not reveal whether his company prefers a floating option.
"It's horses for courses," Dr Ruhl told a roundtable discussion in Sydney on Monday.
"It hasn't been tested on a grand scale."
Dr Ruhl was also asked whether floating liquefied natural gas (LNG) would play a part in BP's future projects.
"If you're asking about Browse, I can't comment on that," Mr Ruhl said.
"I think we will all know by June."
With 14 LNG projects worth more than $170 billion underway, Australia is the world's third-largest LNG exporter and aims to lift export capacity by 60 million tonnes to make it the world's largest producer of the product within five years.
Dr Ruhl said he expected oil prices to remain firm, at or below the current range over the next few years.
"I don't see prospects for these kind of price increases projected," he said.
He also said the industry was experiencing record price differentials for gas.
"These differentials will be held up as long as demand in Asia is high enough to take energy away from Europe.
"This will come under pressure with the start of these exports from Australia plus US exports."
While there was steady demand for LNG, supply was lumpy.
Dr Ruhl predicts supply in Australia will pick up in 2015/16.
Meanwhile, spot pricing would begin to affect LNG producers and consumers, but long-term pricing contracts were still dominant.
Stronger competition, a boost to supply, and power market reform had led to the implementation of spot prices and the dismantling of some long-term gas contracts indexed to the price of oil.
"If the Australian projects are coming on and you have US exports at the same time and the global economic recovery is not all too strong, you will have a lot of LNG coming on," Dr Ruhl said.
