Risk of WA fac­ing gas cri­sis warned

Pilbara News - - News - Daniel Mercer

WA could be hit with a do­mes­tic gas sup­ply crunch within two years if there are de­lays to a pro­cess­ing plant at Chevron’s $45 bil­lion Wheat­stone LNG project near Onslow.

In a snap­shot of the WA gas mar­ket re­leased last Thurs­day, the Aus­tralian En­ergy Mar­ket Op­er­a­tor said there was uncer­tainty about the se­cu­rity of do­mes­tic gas sup­plies de­spite a seem­ing abun­dance of providers.

Key to AEMO’s con­cerns is the con­struc­tion of Wheat­stone’s do­mes­tic gas plant, which is sup­posed to come on stream in 2018, a year af­ter first LNG ex­ports from the project.

Up to 200 ter­a­joules a day — the equiv­a­lent of about 20 per cent of cur­rent de­mand — are sup­posed to be pro­vided by the plant when it be­gins pro­duc­tion.

“Should there be de­lays in the com­mence­ment of the Wheat­stone do­mes­tic gas pro­duc­tion fa­cil­ity, the do­mes­tic mar­ket could be­come tight in 2017 or 2018,” AEMO’s boss in WA Cameron Par­rotte said.

Longer term, AEMO said there was even more uncer­tainty about where the do­mes­tic mar­ket would get its gas from 2021.

Ac­cord­ing to the re­port, sev­eral gas-pro­cess­ing fa­cil­i­ties, such as the North West Shelf’s Kar­ratha gas plant, would no longer be legally re­quired to sup­ply the lo­cal mar­ket.

It said those providers would only con­tinue to sup­ply do­mes­tic con­sumers if they could se­cure vi­able prices, which are ex­pected to fall as pro­duc­tion from Wheat­stone and Gor­gon weighs on the mar­ket.

Ad­ding to the uncer­tainty was the fact some com­pa­nies, in­clud­ing the part­ners be­hind the Kar­ratha gas plant, would need to in­vest in bring­ing new gas fields on line as older ones be­came ex­hausted.

“There is a risk to sup­ply af­ter 2021 if there is no con­tin­ued in­vest­ment ex­pen­di­ture into the de­vel­op­ment of gas re­serves,” the re­port said.

“Sev­eral do­mes­tic pro­duc­tion fa­cil­i­ties may not have suf­fi­cient de­vel­oped re­serves to con­tinue op­er­at­ing be­yond 2021.

“From 2022, the level of sup­ply is sub­ject to the con­tin­ued ex­pen­di­ture to de­velop gas re­serves sup­ply­ing the WA do­mes­tic mar­ket.”

De­spite the uncer­tainty, AEMO noted there were op­por­tu­ni­ties to boost de­mand for do­mes­tic gas in WA, in­clud­ing by “fuel-switch­ing” diesel-fired trucks and mi­ne­sites to gas and in­creas­ing its use for elec­tric­ity gen­er­a­tion.

Newspapers in English

Newspapers from Australia

© PressReader. All rights reserved.