Review confirms abundant gas supply in WA

An independent review of Western Australia’s gas market confirms the State has more than enough gas to meet its future export and domestic requirements.

The Australian Energy Market Operator’s (AEMO) annual Gas Statement of Opportunities (GSOO) released today forecasts an excess of available gas over the next decade.

However, AEMO says its forecast is dependent on continuing investment in new exploration and development. It has also warned that exploration in WA is currently at its lowest level since 1990.

“Growth in domestic gas demand is forecast to be a marginal 0.1% over the outlook period, as there are only a handful of large gas consumers that are expected to enter the market over this horizon, and we are projecting a lower decrease in gas consumption from both mining and minerals processing since this was last reported in the 2015 WA GSOO,” said AEMO’s executive general manager, Western Australia, Cameron Parrotte.

“Assuming the continued development of gas reserves, domestic gas supply in WA could exceed demand by at least 88 terajoules (TJ) per annum over the 10 year outlook period.

“However, should there be delays in the commencement of the Wheatstone domestic gas production facility, the domestic market could become tight in 2017 or 2018.

“It is important to highlight that continued expenditure may be required to enable several other domestic production facilities to have sufficient developed reserves to operate beyond 2021.”

APPEA chief operating officer, Western Region, Stedman Ellis said the GSOO confirmed WA had enough gas to meet its current export and domestic needs for more than a century.

“The entry of new supply from projects such as Gorgon, Waitsia and Wheatstone is clearly good news for the many homes, businesses and industries that rely on gas for their energy needs,” Mr Ellis said.

“Confidence in domestic supply is also reflected in AGL Energy’s recent announcement that it intends to enter the WA retail gas market and Woodside’s plans to promote LNG as a transport fuel in the Pilbara.”

Mr Ellis said the GSOO reinforced the need for policies that encouraged exploration and development of new gas supply.

He said policy-makers needed to recognise the risks faced by companies from policy instability and investment uncertainty.

“WA needs to rethink its approach to energy security. The existing reservation policy is clearly not sustainable,” Mr Ellis said.