The WA Government’s Economics and Industry Standing Committee (Committee) tabled the “Domestic Gas Security in a Changing World: Inquiry into the WA Domestic Gas Policy: Final Report” (Report) on Western Australia’s domestic gas policy (Policy) into Parliament on 15 August 2024. The Report is the culmination of 59 weeks of inquiry.
The inquiry arose from concerns that some liquified natural gas (LNG) producers will not meet their domestic gas commitments under the Policy by the time the gas projects reach end-of-field life. A concurrent concern was forecasting indicating that WA may experience shortfalls of gas almost every year until 2033. WA faces increasing demand for gas and declining supply.
The Report puts forward 30 recommendations to the State Government as to how it can improve the operation of the Policy. These include:
- in the interest of regulatory certainty, the Report does not propose changes to the current reservation quantity of 15% (or equivalent amount as specified in the relevant agreement) for existing agreements
- for new LNG projects or gas fields, the recommendation is that the reservation amount is set at levels necessary to mitigate any expected domestic gas shortfall (based on the WA Gas Statement of Opportunities forecast) which may be a reservation amount greater or less than 15%.
- enacting a new domestic gas security policy within a legislative framework
- investigation by the State Government into establishing a transparent public long term trading market for domestic gas
- no further retention leases or renewals be granted in WA’s offshore waters, the principle being that if a current holder is not prepared to develop the resource now, it should be returned to the pool for exploitation by another proponent
- improving the terms of domestic gas agreements where necessary to make them more robust in terms of guaranteeing that producers will meet their commitments to the domestic market
- that there be no change to the current policy of not allowing the export of LNG from onshore gas developments on the existing pipeline network until the domestic gas market is adequately supplied and expected to be well supplied for a period of time.