Cook to revisit domestic gas export rules

Premier Roger Cook has left the door ajar for the export ambitions of gas developers in the Perth Basin, committing to look at the state’s domestic policy settings over the next six months.  

Addressing media this morning, Mr Cook said the government would consider the policy settings in the coming months.

“It was a Carpenter government that brought in the domestic gas reservation [policy], it was a McGowan government that tightened that further, and a Cook government which tightened it further still,” he said.

“We are the stewards and initiators of the domestic gas policy. It means we’ve got cheaper gas, which means we have cheaper power bills for Western Australians.

“But we need to look at those policy settings all the time, to make sure it continues to be in the benefit and interest of Western Australians.”

Developers were hit by a quiet policy change in August last year, which removed their ability to apply for LNG export exemptions covering gas projects on existing state pipelines.

The policy shift, designed to secure local gas supply in a tightening market, was particularly impactful in the Perth Basin, where a number of projects are being developed by companies including Mineral Resources and Strike Energy.

It was made on the same morning that a parliamentary inquiry into the state’s Domestic Gas Policy began, looking at all aspects of policy, including the effective administration of a 15 per cent gas reservation requirement applied to offshore producers.

Strike and MinRes have been publicly critical of the exemption ban, which they claim could impact the scale of their development plans in the Mid West region’s gas basin.

Kerry Stokes-backed Beach Energy, which is developing the delayed Waitsia stage two gas project alongside joint venture partner Mitsui & Co, was contentiously granted an export exemption by former premier Mark McGowan in 2020.

Beach told the inquiry it may not have had the confidence to proceed with an investment decision if not for the LNG export exemption. 

Mr Cook said he anticipated any changes to the policy would be made in the next six months.

“That’s my anticipation,” he said.

“I want to sit down with the onshore domestic gas players, to understand what their commercial constraints are, and make sure that we have gas available to the WA community.

“It’s WA’s gas, and as a result we need to make sure that Western Australians are the ones that benefit from it.”

Concerns over domestic gas supply were inflamed by the Australian Energy Market Operator’s 2023 Gas Statement of Opportunities in WA in December, which forecast big shortfalls even as expected new supply comes into the domestic market.

The WA Domestic Gas Policy Inquiry's findings are expected to be tabled at the end of May. 

A silver lining on a dark cloud, the recent closure of Alcoa’s Kwinana refinery could free up as much as 5 per cent of the state’s domestic gas supply, according to some reports.

“If you're going to find a silver lining, that might be it," Mr Cook said in response to questions about the closure's gas supply implications on Tuesday.