“Japan and Korea can’t believe we don’t have a long-term energy security policy,” Bowler told the audience at a dinner meeting following the club’s 40th annual general meeting.

The minister said the Government still had a gas reservations policy and would impose reservations of up to 15% on Pluto.

However, a Woodside spokesperson told PetroleumNews.net that gas reservations could threaten the viability of Pluto, especially if they were imposed at a level at or close to 15%.

The office of Federal Resources Minister Ian Macfarlane said not only would the imposition of gas reservations reduce the commerical viability of projects such as Pluto, but it was also introducing a condition that was not in place when petroleum companies risked millions in exploration.

"This is introducing sovereign risk and reflects badly on the WA LNG industry," a spokesperson said.

However, Bowler said the State Government would be prepared to be flexible and to discuss how reservations on other projects could be delivered on a case-by-case basis so that all developments affected remained viable.

But he conceded that the WA Government could not impose reservations on projects that both sourced and processed their gas in Federal waters.

The minister was asked if this made it likely that future WA LNG projects would set up offshore processing facilities in order to evade gas reservations.

“It’s possible,” he told PNN.

Pluto and Pilbara LNG, which would source gas from the Scarborough field held by BHP Billiton and ExxonMobil, are the only planned projects firmly committed to onshore processing facilities. Inpex’s Icthys LNG development and the Woodside-operated Browse project are considering offshore processing options that could be in either state or federal waters.