Peter Collier
Minister for Energy; Training and Workforce Development
Fri 26 December, 2008
State Government opens door to greater domestic gas supplies
Portfolio: Energy
The State Government will introduce legislation to Parliament which aims to ultimately provide greater supply of gas to the domestic market at lower cost.
Under the proposed legislation, the Government plans to regulate the make up of gas in the State pipeline network and subsequently broaden gas characteristics for the domestic market. The gas specification for pipelines in Western Australia is determined in commercial contracts.
This follows extensive consultation with industry stakeholders after the release of an Issues Paper in October.
Energy Minister Peter Collier said broadening the make up of gas for the domestic market would encourage development of gas fields, such as BHP Billiton’s Macedon, that sit outside specifications for delivery through WA’s gas pipeline network.
“This will enable more gas fields to develop and help meet the projected shortage of gas,” Mr Collier said.
“It is also expected to improve competition among gas suppliers, thereby placing downward pressure on local gas prices.”
Under the proposal, gas producers that supply at the broader specification would compensate pipeline owners and large consumers for increased costs to their operations. This would be done through commercial negotiations.
Suppliers could avoid these costs by treating broader specification gas to meet current requirements before it was delivered into the pipeline network.
The Government will also prohibit the use of some pre-1980 gas appliances that could have safety issues.
Suppliers providing gas at the broader specification will pay a levy to fund replacement or service of these appliances, at an estimated $35million cost.
It is proposed that the broader gas specification and appliance prohibition will apply from January 1, 2012.
Minister's office – 9213 7150