West Oz Tightens Gas Export Rules
The Western Australian (WA) government has tightened domestic gas policy in a bid to secure local supply, it said on August 17 in a statement.
Premier Mark McGowan announced that the WA domestic gas policy would be amended to prevent the export of local gas. Under the updated policy, domestic gas cannot be exported to the eastern states or overseas. But gas used to power ships will not be considered domestic gas.
According to the government, the domestic gas policy “secures the state's long-term energy needs and ongoing economic development by ensuring that LNG export project developers also make gas equivalent to 15% of exports available to the domestic market.”
The government has, however, given in-principle support to allow the Waitsia project to fill available capacity at the Karratha gas plant and export some of its gas as LNG for “a short period of time”.
The policy also includes greater transparency and increased reporting so that industry knows who is supplying gas and how much is available in the market, the government added.
“For the domestic gas policy to work, the market also needs to know how much gas is available to it, and when the gas is available. We've listened to WA industry's calls for this transparency and the amended policy will ensure it happens,” McGowan said. "We have seen what's happened on the east coast with local gas supplies being prioritised for export and we won't let that happen here.”
McGowan added that the traditional LNG projects like Browse and Scarborough must also reserve 15% of exported gas volumes for domestic use.
The apex industry body Appea said that the decision to place restrictions on the development of new energy resource runs counter to the government’s Covid-19 recovery plans of stimulating the economy and creating jobs.
“Development of gas resources takes many years to assess, explore and appraise, costing many millions of dollars in investment before it is even clear if a resource is commercially viable to develop,” Appea’s WA director Claire Wilkinson said. “Cutting off a potential market for any gas developed is a sure way to signal that WA is not open for business. Worryingly, there was no industry consultation on this sudden change to the domestic gas reservation policy.”