Warrego Energy Limited advises that recently announced changes to Western Australia’s domestic gas policy, which will restrict the export of onshore natural gas, will have no effect on Warrego’s gas marketing activities.
Warrego’s gas marketing plans have been focused on domestic customers and the Company remains in advanced negotiations for gas sales agreements.
The Western Australia domestic gas market has entered a tightening phase in line with reduced output from North West Shelf (NWS). Delays to major offshore projects, Browse and Scarborough, will further tighten the domestic demand-supply outlook potentially resulting in a 200 TJ/d shortfall from 2022.
With significant volumes from the Waitsia gas field approved for LNG export via NWS, Warrego and its 50%-owned West Erregulla gas field are well positioned to supply the Western Australia domestic market.
Warrego’s Executive Director & CEO Australia, David Biggs, said: “The Western Australia domestic gas market has been tightening for some time in line with the decline in production from the NWS. Delays to the Browse and Scarborough offshore gas projects will exacerbate the gap between supply and demand from 2023-24 all the way out to the late 2020s.
“Modifications to Western Australia’s domestic gas policy were not entirely unexpected given the likely shortfall in supply due to delays to offshore projects, and marketing plans for our share of West Erregulla gas have been focused exclusively on domestic customers.
“The fact that the nearby Beach/Mitsui Waitsia gas field has been exempted from these restrictions and will process and export significant gas volumes via the NWS facility is a positive for Warrego and West Erregulla,” he said.
“West Erregulla, located in the Perth Basin close to major gas pipelines and infrastructure, clearly has the potential to be one of the most competitive sources of large-scale gas supply available to the Western Australia domestic market over the next decade.
“Additionally, we are about to commence the 2020-21 West Erregulla exploration/appraisal drilling campaign and any increase in certified resources will be welcomed by the market,” Biggs concluded.