WA gas exports lead to domestic shortages

Coal as alternative: Newmont Mining selected coal-fired power as the energy source for its massive Boddington gold project, citing the price and difficulty of securing long-term gas contracts. Iron ore miner Gindalbie Metals was also negotiating with coal-fired power stations after being unable to secure a long-term gas contract for its planned $1 billion magnetite project in WA’s mid-west. WA Premier Alan Carpenter agreed that there were strong environmental and economic reasons for ensuring extra gas was made available. "With the domestic gas policy, we’re trying to secure sufficient supplies in the long term [but] the issue there is that none of that will be on stream in the next five, six or seven years, so what do you do in the meantime?" he said.

Gas reserves policy: "It needs all parties, including the state – and this has started to happen – to look at all the ways of ensuring such a shortfall doesn’t take place. It’s in nobody’s interests to see a shortfall of gas for the WA domestic market – gas producers, consumers and the pipeline owners would agree." Carpenter angered producers last year by introducing a policy forcing new gas projects – including Woodside’s $10 billion Pinto project – to set aside up to 15 per cent of reserves for the domestic market. However, the ERA report found that gas from the Pinto project would not likely reach the WA market until 2018 and that, due to delays, domestic gas from another new source, Chevron’s proposed Gorgon field, would not be available in 2012 as originally planned.

The Australian Financial Review, 18/6/2007, p.6

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