DOMESTIC GAS RESERVATION
1331. Hon CHARLES SMITH to the Leader of the House representing the
Minister for State Development, Jobs and Trade:
I refer to the recent article on
WAtoday dated 1 December headed ''Why does energy-rich WA need to frack?''
(1) Does the
government intend to toughen up domestic reservation policy and/or renegotiate
export contracts in the near future to offset the reported looming gas
(2) If no to (1), why not?
(3) Is the government in favour of
(4) If no to (3), why not?
(5) Why was
Chevron allowed to defer domestic supply from its massive Gorgon and Wheatstone
gas projects until well after initial production began?
Hon SUE ELLERY replied:
I thank the honourable member for
some notice of the question.
WA gas market is currently well supplied. Gas available under the Gorgon, North
West Shelf and Wheatstone domestic gas arrangements can meet half of WA's
gas needs over the next two decades at current levels of demand. At current
levels of demand, the WA market will need new sources of gas within a decade.
New gas supply could come from domestic gas commitments of third parties
tolling gas through WA's existing onshore LNG facilities, the
implementation of Pluto's domestic gas arrangements and the development
of new reserves by domestic-only producers.
The next phase of LNG industry
development in Western Australia is focused on brownfield sites with domestic
gas arrangements in place. For example, the developers of the Browse and
Scarborough, and Clio and Acme projects are seeking to toll their gas through
existing LNG facilities in the Pilbara. The domestic gas arrangements covering
these facilities will apply domestic gas obligations upon each of the third
party users, consistent with the WA domestic gas policy. The WA domestic gas
policy provides for gas prices and contract terms to be determined by the
(5) Domestic gas agreements are negotiated on a project-by-project
basis in line with the WA domestic gas policy. They are negotiated at project
inception and cover reservation; marketing, including timing; and
infrastructure obligations. Gorgon gas is being marketed in two tranches. The
300-terajoule-a-day Gorgon domestic gas facility has been constructed, and it
commenced supply of the first tranche of a little over 150 terajoules a day in
2016. Supply of the second tranche is expected by 2021. Commissioning of
Wheatstone's 200-terajoule-a-day domestic gas facility is expected
before the end of the year.