Aussie costs a big challenge: Shell The head of global energy giant Shell says rising costs are a challenge for doing business in Australia. Royal Dutch Shell wants to develop a floating liquefied natural gas (LNG) project in Western Australia, after last month withdrawing support for an onshore plant at James Price Point, north of Broome. West Australian MPs on both sides of politics fear the proposed offshore Prelude project will hit royalties, as it falls mainly outside state waters. But Royal Dutch Shell chief executive Peter Voser says cost pressures are a challenge for companies operating in Australia. "As you know, rising costs have become a significant challenge for companies doing business here," he told the Australian Petroleum Production and Exploration Association conference in Brisbane on Monday. He said Australia's gas producers were operating in a highly competitive international market. "In addition, this country is facing rising competition from other gas producers in North America, Asia and East Africa," he said. Mr Voser said the federal government needed to prioritise boosting the number of graduates with the skills to "take on big energy projects," and lower taxes to drive innovation and investment. This is particularly true in Australia, where our industry is dealing with a shortage of employees with specialised technical skills. He said Shell was proposing the world's largest floating facility 200 kilometres off the Kimberley coast, which would create 350 direct jobs over 25 years. "This massive display of technological know-how will eliminate the need to devote land and pipelines to process LNG onshore," he said. It also holds the promise to unlock additional significant reserves of already discovered gas that otherwise would not be tapped. Shell last month withdrew support from joint venture partner Woodside's $45 billion Browse LNG onshore gas project.