WA Govt Gas Policy Report Today, page-273

The issues I have are with these statements...

“I think we really need to test that proposition in terms of whether it impacts on the commerciality of bringing that gas to the domestic market."

If you go back to the submissions by the gas producers, there was never a question of the gas being sold into the domestic market at a commercially viable price. It was always about how to help financially underpin the extra upfront cost of building larger production infrastructures in order to help facilitate bringing more supplies onto both the domestic and export market.

“We’ve spoken to a range of customers who think that there’s plenty of demand and plenty of capability of paying a reasonable price for that gas.”

It shouldn't take a government inquiry to establish that there is plenty of demand. Seriously? Isn't the whole point of the inquiry to look at how to navigate around AEMO's forecast shortfall?

The two points of contention in the above statement is around capability to pay a reasonable price. Having the capability to pay for more and actually willing to pay for more is two very different thing. Why would any major industrial gas user such as WES and AGL be willing to pay for more even though they can afford to pay for much more? Does "reasonable price" include the NPV cost of building a large plant? Will that demand be willing to sign long duration contract to help financially underwrite/underpin some of the upfront cost of building larger production infrastructures?

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