The Western Australian Government has updated the WA Domestic Gas Policy for Perth and Canning Basin, and exemptions will not be considered in an effort to secure the state’s gas supply and support long-term economic and industrial development.
The update follows the August 2020 update to the WA Domestic Gas Policy, which prevents the export of onshore gas through the existing pipeline network.
To ensure domestic energy security, the Western Australian Government will not consider exemptions from the WA Domestic Gas Policy for onshore gas developments on the existing pipeline network to export LNG, including those in the Perth Basin. Gas from the existing pipeline is for Western Australian industry and consumers only.
For the Canning Basin, these gas resources are not connected to the existing pipeline network and as such a normal application of the WA Domestic Gas Policy applies, which requires gas project developers to make 15 per cent of exports available for the domestic market.
The Australian Petroleum Production & Exploration Association (APPEA) said that the State Government’s decision not to consider any exemptions from the WA Domestic Gas Policy would discourage investment at a time when the state needs more gas supply to meet growing demand as coal shuts down and new mineral processing industries emerge.
APPEA WA Director, Caroline Cherry, said the changes would make it harder for onshore proponents to access investment for projects and disincentivise producers from bringing new supply into the market.
“This is a disappointing outcome particularly given there is a Parliamentary Inquiry currently taking place into the effectiveness of the Domestic Gas Policy and the government has preempted any recommendations out of the Inquiry process,” Ms Cherry said.
“Part of the ongoing inquiry was looking at the State Government’s role itself in ensuring adequate supply into the future and yet these preemptive policy changes without consultation will undermine investor confidence.”
In December, the Australian Energy Market Operator (AEMO) WA Gas Statement of Opportunities (GSOO) found overall Western Australian domestic gas demand was forecast to increase from 1,099TJ per day in 2023 to 1,278TJ day in 2032, at an average annual rate of 1.7 per cent.
“Western Australia needs to bring more gas supply to the market to power the state’s growing resources sector and support the South West electricity system as coal-fired power is phased out,” Ms Cherry said.
“But today’s changes, and the way they have been announced, are the opposite of what is needed and will only diminish new gas supply investment and the state’s path to net zero.”