OPPOSITION resources spokesman Ian Macfarlane says unions are to blame for Woodside Petroleum's decision to shelve the $40 billion Browse LNG project in Western Australia.
Woodside boss Peter Coleman said he remained confident the project, which would have involved the construction of an onshore processing operation at James Price Point north of Broome, would go ahead in the future.
But a formal decision would be at least two years away, he said.
Mr Macfarlane said the decision not to proceed, which was based on cost blowouts, was a blow to the West Australian economy and the Australian resources sector.
He blamed "escalating labour costs" in the north-west of WA for making mining projects "prohibitively expensive".
"There have been significant cost blowouts on projects like the Gorgon LNG development, and when coupled with over the top claims from the CFMEU and MUA as well as the rising dollar, this has put the brakes on international enthusiasm for Australian LNG projects," Mr Macfarlane said.
"The Coalition supports strong and fair wages for these projects, but if Australia is to be competitive our higher wage costs must be accompanied by better productivity.
"If elected in September, a Coalition government would prioritise strategies to make Australian LNG projects internationally competitive, including the return of a strong cop to the beat in the form of the Australian Building and Construction Commission."
Prime Minister Julia Gillard told reporters in Sydney Woodside's decision not to proceed was "an issue for it to deal with", citing the fact it had not been made because of any federal or state government regulatory issues.