Federal Environment Minister Tony Burke has stopped the clock on the
Commonwealth's environmental approval process for the James Price Point
gas hub until he receives fresh details of any reworked State plans for
the site.
The decision complicates the Barnett Government's
attempt to rescue something from the wreckage of the decision by
Woodside Petroleum and its joint venture partners to walk away from the
controversial $40 billion land-based LNG hub, amid spiralling costs.
As
part of this drive, Premier Colin Barnett yesterday reintroduced
legislation into the WA Parliament to help develop massive gas reserves
in the onshore Canning Basin, which are considered a possible Plan B for
James Price Point-based exports.
Canning Basin development Bill introduced
- Legislation will allow for the development of the Canning Basin gas
- Domestic gas project the first priority
- Will ensure gas supplies for State’s future energy needs
Western Australia has taken another important step in ensuring the development of the vast gas resources of the Canning Basin.
Premier
and State Development Minister Colin Barnett said the vast onshore gas
resources of Canning Basin would be developed under the provisions of a
Bill read into State Parliament today.
Mr
Barnett said the Bill ratified the Natural Gas (Canning Basin Joint
Venture) Agreement signed by the State Government with joint venture
partners, Buru Energy Limited and Mitsubishi Corporation.
“This
legislation will bring about the continued exploration for natural gas
in the remote Canning Basin, the development of a gas pipeline to the
Pilbara and ensure Western Australian consumers have first use of any
gas discovered,” he said.
The
Premier said the US Energy Information Administration estimated the
Canning Basin unconventional gas resources at about 229 trillion cubic
feet - about one and a half times WA’s currently identified offshore
resources.
The
Canning Basin covers 530,000 sq. km stretching from the coast between
Port Hedland and Broome, to the State’s eastern border.
The gas resources in this arid area are located between two and four kilometres below the ground’s surface.
“Tapping this vast resource will guarantee Western Australia’s domestic gas supplies well into the future,” Mr Barnett said.
“Because this gas is located onshore, it is also entirely owned by the State Government.
“This
agreement ensures gas discoveries are rapidly brought into production,
and that gas is delivered to the State’s domestic gas network, before
any is exported.”
Once the domestic gas project is under development, the agreement provides for potential future gas supply for gas export.
Natural
gas provides about 50 per cent of the State’s domestic electricity
generation, and contributes to the production of key resource exports
including iron ore, alumina, base metals and gold.
“This
will also ensure that future energy-intensive mining opportunities and
other manufacturing industries will benefit considerably from an
expansion of WA’s domestic gas supply sources,” the Premier said.
“Natural
gas is also an ideal partner for the State’s growing renewable energy
production as a back-up in times of adverse weather conditions and peak
demand.”
The
Premier said the agreement provided additional security of tenure for
17,000 sq. km (1.7 million hectares) covered by five exploration permits
held by the joint venture. These permits anchor the joint venture’s
Canning Basin Domestic Gas Project, with the agreement facilitating
further targeted gas exploration in these permits and the development of
a pipeline to transport gas south to existing industrial areas.
If
commercially viable gas resources are discovered, by mid-2016 the
partners will be required to submit a plan for construction of the
domestic gas project, including a pipeline connecting to the existing
State gas network in the Pilbara.
Under
the agreement, the partners are still required to obtain relevant State
and Commonwealth environmental, safety, Aboriginal heritage and Native
Title approvals for their exploration, development and infrastructure
proposals.
Fact File
- The agreement, which is for an initial term of 25 years, with a possible 25 years extension, will:
- encourage
investment in a significant exploration and evaluation program to
determine the technical and economic viability of the natural gas
resources
- enable the Government to set firm timetables for development of gas discoveries
- ensure domestic gas production and delivery occurs before any gas is supplied for export
- ensure an amount equivalent to 15% of any gas processed for export is reserved for domestic use
- make
available for sale related products such as ethane, propane, butane and
condensate, for the possible manufacture of chemicals or use as
transport fuel
- defer relinquishment conditions of the Petroleum and Geothermal Energy Resources Act 1967 for five key permits
- facilitate the development of pipelines and other infrastructure to deliver gas to the State’s domestic gas network
- This Bill was also introduced to Parliament in November last year but lapsed with the prorogation
Premier’s office - 6552 5000