WA govt to retain supply policy for major gas projects

The Western Australian government will keep in place a 15 per cent domestic gas reservation requirement for all major gas projects in the state, after a parliamentary inquiry into the state’s gas supply chain.

The policy, established under the previous Labor government, requires producers to set aside 15 per cent of their gas reserves for domestic consumption, rather than for export to Asia at higher returns.

WA Premier Colin Barnett said his government had also approached the federal government to include a domestic gas supply requirement in conditions for granting or renewing offshore petroleum leases in commonwealth waters.

Australian Petroleum Production and Exploration Association (APPEA) director Stedman Ellis said APPEA had concerns about the policy but welcomed plans for consultation on a clear framework for implementing it.

"We are seeing unprecedented growth in WA developments offshore and onshore and this needs to be encouraged as the real foundation for WA's long term energy security and economic prosperity," Ellis said.

The parliamentary inquiry was initiated after a 2008 explosion at Apache Energy's Pilbara facility on Varanus Island that cut WA's gas supply by 30 per cent and cost industry an estimated $2.5 billion.

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