Premier Colin Barnett put the price of domestic gas firmly on the agenda last night, telling the Petroleum Club of Western Australia's annual meeting that a competitive domestic gas cost was part of doing business in the state.
“Price does matter,” Mr Barnett said, reiterating the state’s policy of a 15 per cent domestic gas reservation.
“It will be on the table in any negotiations.
“As a rule of thumb it is a reasonable thing that domestic gas should not exceed the price of gas fed into an LNG project.
“I would say that is a reasonable premise.
“As an industry I would make sure that you are supplying the domestic market at a price that gives us at least a marginal competitive advantage.”
However, Mr Barnett said that the state was prepared to be flexible in its negotiations, depending on the circumstances of each project.
As for reserving domestic gas, he said that included the potential for projects to be credited for gas supplied from other fields.
He also signalled that issues such as the environment would not go away and were another element of operating in a state which remained a good place to do business.
Mr Barnett also raised the issue of retention leases but said he understood there needed to be an orderly approach to development.
He again said the gas from the Browse Basin would be processed in the Kimberley, which was an important project for the development of the region and reconciliation with Aboriginal people.
"Australia can't leave the north of this country undeveloped in this century," he said.
Mr Barnett said the global financial crisis has changed the balance at the negotiating table and governments would now take an even greater interest in project development.
"We do have our own agenda."
