Major WA Consumers Push for Domestic Gas Allocation

Floating LNG players like Woodside Petroleum and Shell would be forced to allocate more of their onshore gas production to the West Australian government under a plan being pushed by two of the state’s major gas consumers, Alcoa and Alinta, The Australian Financial Review (AFR) has reported.

An industry lobby group backed by the two companies wants the government to consider forcing floating LNG developers to make up for domestic gas shortfalls by taking a bigger slice of onshore production, AFR said.

DomGas Alliance member and Alcoa Australia energy development manager Michael Shaw said a “practical” way to capture domestic gas from floating LNG projects was to create a “reserve swapping” system, AFR reported.

This would force groups like the Woodside-led Browse joint venture to meet domestic gas obligations even though the offshore project would have no domestic gas processing capabilities. The proposal could foster a national gas reservation system.

WA is the only state that forces gas developers to set aside 15 per cent of reserves for domestic customers, AFR said.