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Gas supply report to minimise gas supply disruption

The Gas Supply & Emergency Management Committee (GSEMC) report provided to the Western Australia Government today provides several recommendations that can cost effectively minimise the impact of a gas supply disruption, according to Australian Petroleum Production & Exploration Association (APPEA) Western Australia director, Tom Baddeley.

“A government incentive for electricity generators to install or retrofit duel-fuel generation capacity will help to minimise the impact of a gas supply disruption through the ability to switch to liquid fuel,” said Baddeley.

“Ensuring an adequate strategic stock of diesel to meet abnormal demand in the event of a gas supply disruption, with associated costs to be passed through to those who benefit will ensure supply levels are maintained during a response to a gas supply disruption and allow consumers to make informed decisions on their level of consumption during these events.

“The provision of additional gas storage capacity with the associated costs to pass through to those who benefit will provide a strategic supply of gas to residential and small business gas tariff customers and similarly allow consumers to make informed decisions on their level of consumption during these events.”

According to APPEA, the implementation of a Gas Bulletin Board (GBB) will improve information transparency, and the Gas Statement of Opportunities (GSOO) will provide important demand and supply information for market participants in their future planning and in making commercial decisions on investments in infrastructure.

APPEA believes both the GBB and GSOO should leverage off the existing national processes; be administered by an independent WA specific entity in close liaison with the relevant national authority; and should be governed by a board of industry representatives and funded by the market participants who benefit.

“The report contains a number of constructive measures that would minimise the impact of a gas supply disruption, however APPEA does not believe sufficient evidence has been provided in the report to support suggestions there is an emerging tightness in gas supply for the WA domestic market,” said Baddeley.

According to the WA Department of Mines & Petroleum (DMP), there is 136Tcf of natural gas off the coast of north and north-west WA (more than 130 years’ worth of current annual production) and new major discoveries are being made on a regular basis.

In addition, the Devil Creek Development Project, currently under construction, will boost Western Australia’s gas supply by 20 per cent and the Gorgon LNG Project will increase the state’s gas supply by 30 per cent, APPEA claims.

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