The State Government has negotiated a new domestic gas commitment from the North West Shelf joint venture.
Premier and State Development Minister Colin Barnett said operator Woodside Energy and its partners had agreed to reserve domestic gas equivalent in volume to 15 per cent of new approved LNG exports.
The gas will come in part from new developments at Persephone and Greater Western Flank Two, which will underpin the future operation of the project’s processing plant.
These new developments will also enable the joint venture to export a further 86 million tonnes of LNG.
“The State Government is committed to ensuring that the WA community has a stable supply of gas, particularly at a time when the State is poised to become one of the world’s largest producers of LNG,” Mr Barnett said.
The new commitment is equivalent to approximately 100 terajoules per day of additional gas for the domestic market - about 10 per cent of the current supply.
Under the agreement, any gas produced by a third party and processed through the joint venture’s plant will also be subject to the domestic gas commitment.
The North West Shelf’s existing domestic gas contracts will taper off by 2020, and the State’s Independent Market Operator had identified this as a key uncertainty for the energy sector at a time when the domestic gas market would be tightening.
The Premier said the new commitment cemented a long history of co-operation between the State Government and the NW Shelf Joint Venture dating back to the early 1980s.
“This agreement will help to bring more confidence and certainty for the Western Australian energy sector and energy-intensive industries such as manufacturing around the future supply of gas,” Mr Barnett said.
“This outcome is consistent with the State’s domestic gas policy, and we will continue to work with other producers to ensure ongoing supplies of domestic gas for WA into the future.”
The agreement will be formalised through an amendment to the North West Gas Development (Woodside) Agreement Act 1979, to be introduced into State Parliament later today.
The Premier thanked the North West Shelf joint venture for working with the Government.
Production from the new gas developments is expected to start in 2017.
WA’s domestic gas policy requires LNG producers to reserve domestic gas equivalent to 15 per cent of LNG exports; have infrastructure in place to supply gas, and to market gas into the domestic market
The North West Shelf project was Australia’s first LNG export project, and celebrated the 25th anniversary of its first exports this year
The North West Shelf Project supplied around 5,150 petajoules of gas to the domestic market between 1984 and 2013
Woodside’s partners in the project are BHP Billiton Petroleum, BP Developments Australia, Chevron Australia, Shell Development (Australia), and Japan Australia LNG (MIMI)