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WA urged to rethink onshore gas export ban


The West Australian government should consider dismantling its onshore gas export ban, which is stifling investment in new LNG projects even as demand rises, Strike Energy boss Stuart Nicholls says.

Ahead of a state parliamentary inquiry into the viability of WA’s offshore domestic gas reserve, Mr Nicholls said the government had more than one lever available to impact pricing and should look beyond the function of one policy.

“WA’s price dynamic is a function of supply, not a function of not enough policy driving the right behaviours from producers,” he told The Australian Financial Review.

“Aspects of the existing domestic gas policy, like the LNG export ban for onshore resources, reduces the investment thesis, or investment case, for developing new gas supply in abundance.”

While 15 per cent of offshore gas must be reserved for domestic use, the state government in 2020 announced that 100 per cent of future gas produced onshore needed to be used in WA.

“What’s good enough for them should be good enough for us,” he said.

“They could repeal the export ban for onshore resources because a lot of this is a story of the allocation of capital, not necessarily the lack of drillable opportunities in the Perth Basin.”

Mr Nicholls said making a portion of onshore gas available for export would encourage investment in the basin, which could become a heartland for new gas supply as reserves dwindle further north.

“I’m aware that many other participants in the industry are keen to ventilate other issues. This is not the inquiry for that,” he said.

“I love the contribution Strike Energy is making to the economy of WA. We look forward to it being able to make a meaningful contribution, both in employment and revenue for the state.”