WA Govt . gas decision delay, page-161

Having had some time to consider the report, I would say I am actually quite pleased with it as a STX investor. Under the current policy, there is no export full stop. With the proposed change where onshore gas can be exported if the domestic market is adequately supplied, there is a far better chance of STX accessing the export market especially if they can police/enforce 15% quota from offshore producers. I don't have the offshore production data but I recall reading somewhere that if the government can just get some of the large offshore fields to reserve 10% for domestic market, it would be sufficient to meet the domestic demand.

I am aware that only Pluto had a physical volume specified for domestic market upfront, while most of the other contracts were tied to export volume, price and certain weird conditions that mean most of those fields will only feed into the domestic market in the dying years of those fields when pressure decline has well and truly set in. But if the govt can get Woodside to comply with the spirit of the law rather than the letter of the law, I believe they can meet domestic market demand.

All I am saying is that this report isn't all doom and gloom. Not everything has to be "it is only good if I get what I want right now and in the shape I want it". I wouldn't necessarily go stick LNG netback price assumption into my DCF model and use that as the basis for my investment thesis, but it is worth a mental note that depending on how the offshore compliance is enforced, there may be an opening for export some time in the medium term.

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