WA blocks future onshore gas for LNG export

Western Australia's (WA) state government has blocked the future export of onshore gas for LNG shipment but will allow exports from the onshore Waitsia gas field in the Perth basin. The owners of the field reached an agreement this week for the gas to be processed at WA's 16.3mn t/yr North West Shelf LNG.

WA gas cannot be exported to east Australia or for LNG export as part of the state's revised domestic gas policy, although gas used to power vessels will not be considered domestic gas, said WA premier Mark McGowan.

The state government has given in-principle support to allow the Waitsia project to fill available capacity at the Karratha gas plant and export some of its gas as LNG for a short period of time because of exceptional economic circumstances created by the Covid-19 pandemic, McGowan said.

"There will be no change to traditional LNG projects like Browse and Scarborough, where they must reserve 15pc of exported gas volumes for domestic use," he said.

All WA's LNG projects are subject to the gas reservation policy where 15pc of gas output is earmarked for the domestic market. The 8.9mn t/yr Ichthys LNG in the Browse basin operated by Japanese upstream firm Inpex avoided the reservation policy by building a 900km pipeline to Darwin in the Northern Territory where the project's liquefaction plants are located.

The new policy halts any aspirations the Australian federal government and gas industry supporters have of building a pipeline between WA and east Australia.

A committee set up by the Australian government to address the impacts of Covid-19 on the economy has advocated the need to boost domestic gas supplies to boost manufacturing.

By Kevin Morrison