Gas taken from WA domestic market sent for overseas customers

ABC NEWS (Australia)

It's been almost five years since a massive gas project in Western Australia was controversially exempted from the state's onshore gas export ban. But almost two years since it was supposed to be finished the project is still not operational. In the meantime, the owners have been taking gas from WA domestic market - to supply overseas customers.

Transcript

00:00The Waitzier gas development, about three and a half hours north of Perth, is caught in a bind.

00:08Originally estimated to cost $700 million, the construction bill has almost doubled,

00:13and that's not its only problem.

00:15It was going to start at the end of 2023, and here we are into the back end of 2025,

00:23and it's only just commissioning.

00:25Owned by Japanese giant Mitsui and Australian firm Beach Energy,

00:28which is backed by media mogul Kerry Stokes 7 Group, Waitzier enjoys a privileged position.

00:34It was given a lucrative exemption to WA's onshore gas export ban

00:38by former Premier Mark McGowan in 2020.

00:41Did you discuss the exemption with either Kerry or Ryan Stokes?

00:45Yeah, look, I'm not going to any private conversations I have about commercial matters.

00:49On the strength of that, the partners struck deals to process the gas into LNG via the

00:54north-west shelf and supply overseas buyers from 2023.

00:57But amid the delays, they've turned to extraordinary measures to meet their international obligations,

01:03taking gas from the domestic market on the promise they'll return it from their own fields later.

01:09Domestic gas, when it's in the market in WA is for WA use, not for export.

01:14While neither Beach Energy nor Mitsui would comment,

01:17their backers have pointed out that domestic gas prices in WA have been falling despite Waitzier's

01:23exports. Experts, however, say that's a pure coincidence caused by the loss of some major gas customers.

01:29It's serendipity. It might be good business operations, but I think it goes against the whole

01:35idea that, you know, the gas in Western Australia is for the West Australians to consume.

01:40All forecasts say that is just a short-term phenomenon. Within a couple of years,

01:45we're going to be heading for a shortfall.

01:47A state government spokesman insisted Waitzier would eventually have to meet its domestic gas

01:52commitments. With the export exemption due to expire at the end of 2028, the opposition wants

01:57the state to uphold the integrity of WA's domestic gas reservation policy.

02:02So the domestic gas policy either stands up or it doesn't.

02:05Warning signs of gas market turbulence ahead.

02:10In the agreement and order for валity

02:12No life in the agreement?

02:13I had a backup.

02:14I was unable to consult this market toילk, Bellic,

02:16and órfarm

02:20Tая Spanish

02:23I have not been Verse 7

02:25I have not been Question 4

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