Wood­side be­lieves Pluto won’t run out of gas

Pilbara News - - News - Peter Milne

Wood­side is con­fi­dent it will not have to pipe gas to WA from its gi­ant Pluto project de­spite the com­pany’s five-year re­prieve from the State’s do­mes­tic gas pol­icy end­ing in May.

How­ever, the ab­sence of Pluto gas from the mar­ket may fig­ure in a loom­ing pre-elec­tion de­bate on do­mes­tic gas pol­icy.

The reser­va­tion pol­icy re­quires LNG pro­duc­ers to quar­an­tine gas for do­mes­tic use equal to 15 per cent of the LNG they ex­port.

The pol­icy, which was con­ceived by the Car­pen­ter La­bor gov­ern­ment, is in­tended to stop en­ergy com­pa­nies ex­clu­sively tar­get­ing the lu­cra­tive ex­port mar­ket and iso­lates the lo­cal price of gas from in­ter­na­tional fluc­tu­a­tions.

LNG pro­duc­ers are re­quired to sell the re­served gas only when it is com­mer­cially vi­able, which crit­ics of the pol­icy say is a fatal flaw.

Pluto’s do­mes­tic gas obli­ga­tions start in May, five years af­ter first LNG pro­duc­tion, but it ap­pears that gas from the field off the North West coast will not be pow­er­ing WA in­dus­try or house­holds any­time soon.

“Based on our re­cent ex­pe­ri­ence in the mar­ket, how­ever, there is cur­rently no short­fall in sup­ply and the mar­ket is well sup­plied on com­mer­cial terms,” the com­pany told West-Busi­ness. A spokesman for State De­vel­op­ment Min­is­ter Bill Marmion said the State talked reg­u­larly to Wood­side about Pluto’s do­mes­tic gas com­mit­ments.

The Gov­ern­ment was not con­sid­er­ing any changes to the pol­icy.

WA Na­tion­als leader Bren­don Grylls said he was not con­fi­dent the pol­icy was right and he was con­cerned the tar­geted reser­va­tion of gas would not be achieved.

“The sup­ply of do­mes­tic gas to WA busi­nesses at an af­ford­able price is a key eco­nomic en­abler for the post-min­ing boom econ­omy,” he said.

“We should look be­yond putting all of our re­sources on boats and utilise them ef­fec­tively and lo­cally to add value and jobs.”

A spokesman for Wood­side said it be­lieved the WA pipe­line gas mar­ket was well sup­plied but was con­sid­er­ing sell­ing LNG in the Pil­bara to dis­place diesel as a trans­port fuel.

The Pil­bara was the per­fect place to lead the change to LNG as a trans­port fuel, with LNG plants close to fuel-in­ten­sive min­ing and ship­ping op­er­a­tions, Wood­side chief ex­ec­u­tive Peter Cole­man said last year.

One po­ten­tial cus­tomer, Fortes­cue Met­als Group boss Nev Power, urged Aus­tralia to de­velop its nat­u­ral gas im­me­di­ately to in­crease the com­pet­i­tive­ness of in­dus­tries.

There is cur­rently no short­fall in sup­ply and the mar­ket is well sup­plied on com­mer­cial terms.

Wood­side

Pic­ture: Tom Zaun­mayr

Wood­side’s Pluto gas plant.

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