The WA Government released its much-anticipated Domestic Gas Policy today, aiming to shore up gas for the local market and provide greater certainty for producers and users.
Under the updated policy, onshore gas projects will need to reserve 80% of gas production for WA domestic use up until December 31, 2030, and then will be required to reserve 100% for the local market.
The Government says allowing new gas projects to export a proportion of production over the next five years will help to stimulate development and ensure more gas is brought to market in decades to come.
CCIWA Chief Economist Aaron Morey says the announcement gives some much-needed certainty about the future of gas for the WA market.
“Nobody has benefited from the recent uncertainty, and policy stability will provide more clarity for gas producers and users. We welcome the Government’s strong focus on transparency,” he says.
“It’s clear gas will play a significant role in shaping WA’s economy into the future, not only as a direct energy source but also as a source of heat in industrial production, and as a feedstock in fertiliser and chemical manufacturing. Gas is a lynchpin for the diversification of our economy.
“Policy must always strike a balance between ensuring local supply without compromising long-term investment incentives.”
What this means for projects
The revised policy will apply to new onshore gas projects or existing projects seeking to expand production.
An exemption will remain in place for the 'first-mover' in the Canning Basin, to encourage development in WA’s north.
The Waitsia project will retain its domestic gas reservation obligations and export permit, issued under the 2020 COVID-19 exemption, however the State will consider options to facilitate other gas producers to share their infrastructure – with the view of providing faster access to market for new projects.
WA's successful 15% reservation for offshore LNG projects remains unchanged.
To further accelerate onshore gas developments, the Government will also strengthen use of 'use it or lose it' provisions in the Petroleum and Geothermal Energy Resources Act 1967.
This is to help prevent land banking of onshore petroleum tenements and ensure more gas is brought to market over the coming decade.
The Department of Energy, Mines, Industry Regulation and Safety will conduct a review of the legislation to determine how best the strengthened provisions could be implemented.
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