Implementation of the WA Domestic Gas Policy

Please contact us for further information (see details on sidebar). Domestic gas agreements and related documents can be found at the links below or by visiting WA Domestic Gas Policy Documents.

Gorgon 

The Gorgon State Agreement was ratified in 2003, before formalisation of the WA Domestic Gas Policy in 2006. The agreement provides for the construction of the 300 TJ/day Gorgon domestic gas plant and a 2,000 PJ domestic gas commitment.

Gorgon domestic gas is being marketed in two tranches. The Gorgon domestic gas plant was commissioned in 2016 and commenced supply of the first tranche of about 150 TJ/day. From 1 January 2022, the nameplate capacity increased to 300 TJ/d to support delivery of the second 150 TJ/day tranche.

The first tranche was sold jointly. Each Gorgon Joint Venture company is individually marketing the second tranche.

In June 2023, production from Gorgon Stage Two commenced, which involved the installation of 11 additional wells in the Gorgon and Jansz-Io fields and additional subsea infrastructure to maintain gas supply to the processing facilities on Barrow Island.

Pluto

2006 Pluto Domgas Arrangements

In 2006, Woodside and the State agreed the Pluto Domgas Arrangements. The commitment took effect from 12 May 2017 and is equivalent to 115 TJ/day based on current LNG export rates.

Woodside currently has around 40 TJ/day of domestic gas supply infrastructure in place at the Pluto LNG facilities. It commissioned a 25 TJ/day pipeline gas facility in 2018 and a 0.1 mtpa (equivalent to 15 TJ/day) LNG truck loading facility in 2019.

Woodside markets gas under the 2006 Pluto commitment on behalf of its joint venture partners.

The State continues discussions with Woodside about when and how it will meet the 2006 commitment. In the meantime, Woodside is reserving gas against the commitment. It has also agreed further arrangements associated with LNG production from the Pluto fields. These are the Pluto Acceleration and Additional domestic gas commitment agreements and the Pluto Site Deed executed with the State on 27 January 2021.

Pluto Acceleration domestic gas agreement

The original terms of the Pluto Acceleration domestic gas agreement allowed Woodside to process 3 mt of LNG for export at the North West Shelf LNG facilities to the end of 2025, with an associated domestic gas commitment of 24.7 PJ. This also provides for a stable and regular supply of domestic gas of around 18 TJ/day from May 2022 to the end of 2025. The gas will be sourced from the Pluto fields via a pipeline under construction between the Pluto and North West Shelf LNG facilities.

At Woodside’s request, in August 2022 the Minister for State Development, Jobs and Trade approved a reduction in the LNG Production Capacity Approved Quantity (PCAQ) as allowed for under the Pluto Acceleration Domestic Gas Commitment Agreement. The LNG PCAQ decreased from 3 mt to 2.5 mt, with a corresponding decrease in the domestic gas commitment from 24.7 PJ to 20.5 PJ. The reduction is only anticipated to affect domestic gas supply in the 2025 calendar year.

Woodside’s commercial arrangements with the North West Shelf Joint Venture allow Woodside to acquit the Pluto Acceleration commitment using North West Shelf domestic supply infrastructure. A summary of the local content, industry participation and community development benefits of the Pluto Acceleration project is also available.

Once production of Pluto LNG at the North West Shelf LNG facilities ceases, any remaining domestic gas commitment volume will be carried over to Woodside's Additional domestic gas commitment (below).

In April 2022, the Pluto Acceleration project commenced first deliveries of LNG and domestic gas.

Additional domestic gas commitment agreement

Woodside has agreed to market and make available 45.6 PJ (plus any remaining domestic gas commitment volumes carried-over from the Pluto Acceleration commitment) to the domestic gas market using its share of North West Shelf gas reserves and infrastructure (plus any remaining domestic gas commitment volumes transferred from the Pluto Acceleration commitment). The Additional commitment is separate and in addition to the North West Shelf Joint Venture’s 2015 domestic gas commitment (below).

Woodside’s Additional commitment provides for a reasonably stable and regular supply of domestic gas of around 25 TJ/day from the start of 2025 via the North West Shelf domestic supply infrastructure.

The State is treating Woodside’s Additional commitment as a contribution towards the 2006 Pluto commitment.

2021 Pluto Site Deed

Under the Pluto Site Deed, Woodside will ensure third party users of the Pluto LNG facilities comply with the WA Domestic Gas Policy and have access to domestic gas processing capacity on reasonable commercial terms. The deed also formalises reporting and transparency arrangements associated with LNG and domestic gas production at the Pluto site. 

Wheatstone 

The Wheatstone project’s State Development Agreement requires domestic gas supply infrastructure to be in place and users of the LNG facilities to agree domestic gas commitments. Each Wheatstone Joint Venture participant has signed a Domgas Producer Agreement with the State. The State Development Agreement and Domgas Producer Agreements are confidential.

The 200 TJ/day Wheatstone domestic gas facility is constructed and the first deliveries of gas commenced in March 2019. Initial capacity of the plant was 200 TJ/d but was later increased to 205 TJ/d. In August 2023, the capacity of the plant was further increased to 215 TJ/d with further work to be undertaken to trial even higher domestic gas production rates.

Wheatstone Joint Venture companies market gas on an individual basis.

North West Shelf

In 2015, the North West Shelf Joint Venture assumed a new domestic gas commitment in exchange for an 86 mt LNG export approval. The 2015 commitment provides for a stable and regular supply of domestic gas. Joint venture companies began supplying domestic gas against the commitment in 2016 and market gas on an individual basis.

During negotiation of the 2015 commitment, the North West Shelf Joint Venture struck domestic gas contracts for 42.743 PJ of gas. This volume counts towards the commitment and is included in the total domgas supplied to end-2022, gas supplied under other pre-2015 contracts does not.

From the commencement of production in 1984 through 2022, the joint venture supplied 5,992 PJ of gas to the domestic market (of which 149 PJ is attributed to the 2015 commitment).

The North West Shelf State Agreement allows the joint venture to reduce its 86 mt LNG export approval, which in turn would reduce the domestic gas commitment volume accordingly.

Future users of the North West Shelf LNG facilities are required to enter into domestic gas commitments with the State consistent with the terms of the North West Shelf State Agreement. The Pluto Acceleration and Waitsia approvals were provided on this basis. In March 2020, a 25-year extension of the State Agreement was legislated to accommodate future backfill project opportunities.

In April 2022, the North West Shelf LNG facilities began to process LNG and domestic gas from Pluto on behalf of the Pluto Acceleration project.

Waitsia

The Waitsia Joint Venture has approval to process 7.5 mt of LNG for export at the North West Shelf LNG facilities to the end of 2028, using gas from the Waitsia gas field located onshore in the Perth Basin. Waitsia gas will be delivered to the North West Shelf LNG facilities via the Dampier to Bunbury Pipeline.

The Waitsia domestic gas commitment is associated with the LNG approval and provides for a stable and regular supply of ~20 TJ/day from 2020 to the end of 2028. The Waitsia Joint Venture will supply the domestic market using infrastructure at the Waitsia site, which includes the Xyris Production Facility (nameplate capacity 30 TJ/day) and the Waitsia Gas Plant (nameplate capacity 250 TJ/day; under construction). Gas supplied under the joint venture’s existing Gas Sales Agreements counts towards the Waitsia commitment. 

The Waitsia Joint Venture’s LNG export approval was granted as an exemption under the WA Domestic Gas Policy, which prevents the export of WA gas through the local pipeline network. As such, the approved export volume is capped under the terms of the agreement with the remaining gas from the Waitsia field available for the local market. The joint venture is reporting on compliance against its domestic gas commitment as well as efforts to market its remaining Waitsia reserves to local consumers. The local content, industry participation and community benefits are set out in the Project Development Deed executed between the State and the Waitsia Joint Venture on 23 December 2020.

Scarborough

In November 2021, the State entered into the Scarborough Domestic Gas Commitment Agreement and Scarborough Development Deed with the Scarborough project joint venturers and the Pluto Train 2 Deed – Infrastructure and Domestic Gas Deed with Woodside.

Gas from the Scarborough field will support the production of 8 mtpa of LNG through the existing Pluto Train 1, and through a second train, Pluto Train 2, currently under construction. The Scarborough domestic gas commitment of around 180 TJ/day (during peak LNG production) will be processed through a new 225TJ/day domestic gas facility to be built as part of the Pluto Train 2 project. First LNG from Scarborough is expected in 2026.

Domestic gas supply from Scarborough will underpin new downstream gas processing development and industry in the State. Woodside has contracted a large portion of the Scarborough domestic gas commitment as feedgas for the Perdaman urea project on the Burrup Peninsula.

The offshore Scarborough and onshore Pluto Train 2 projects are separate joint ventures:

• Pluto Train 2 is a joint venture between Woodside (51%) and Global Infrastructure Partners (49%). The Pluto Train 2 Deed captures the joint venturers commitments to regional and Western Australian industry participation, logistics and community development outcomes.

The Scarborough project was originally a joint venture between Woodside and BHP, however following the completion of the merger of the two companies in June 2022, full ownership of Scarborough transferred to Woodside. In August 2023, Woodside announced it had entered into an agreement to sell a 10% non-operating interesting in the Scarborough Joint Venture to LJ Scarborough Pty Ltd (LNG Japan). On completion of the transaction, LNG Japan will assume responsibility to deliver a portion of the Scarborough domestic gas commitment equivalent to its 10% equity share as well as meet the various local content, industry participation and community benefits requirements set out in the Scarborough Project Development Deed.

^{1: Remaining Proved and Probable reserves at 1 January 2022. Source: Rystad Energy. All materials, content and forms, data, and information, provided by Rystad Energy are the intellectual property of Rystad Energy and may not be copied, reproduced, distributed, or displayed without Rystad Energy’s permission to do so. Rystad Energy does not warrant, either expressly or implied, the accuracy, completeness, or timeliness of the information provided here, and is subject to revisions. Rystad Energy disclaims any responsibility for the content error and is not responsible for any actions taken by the “Recipient” or any third-party based on the information provided here. Under no circumstances shall Rystad Energy, or its affiliates, be liable for any indirect, incidental, consequential, special, or exemplary damages arising out of or in connection with access to the information provided here, whether or not the damages were foreseeable and whether or not Rystad Energy was advised of the possibility of such damages.”}

^{2: Based on plateau LNG production.}

^{3: Taking into account new domestic gas commitments struck as part of the Pluto Acceleration project.}

^{4: The State will attribute 40 PJ of Woodside’s Additional commitment to the 2006 Pluto commitment. This accounts for an estimated 6 PJ reduction in the North West Shelf Joint Venture’s domestic gas commitment due to lower LNG production.}

^{5: Includes the 42.743 PJ contract volumes (refer text). The rate is averaged over the assumed North West Shelf field life from commitment commencement to end 2035.}

^{6: AWE Perth Pty Limited is the legal entity and operator of the Waitsia gas field and operates under the Mitsui E&P Australia (MEPAU) brand.} 

^{7: The indicative daily rate is expected to be supplied during peak LNG production.}

^{Abbreviations: 2P: Proved and Probable reserves, TCF = trillion cubic feet, mtpa = million tonnes per annum, mt = million tonnes, PJ = petajoule, TJ = terajoule}

North West Shelf

Gorgon

*JERA is a joint venture between Tokyo Electric Power Co and Chubu Electric Power Co.

Wheatstone

Pluto acceleration

Additional commitment

Waitsia

Scarborough

Other WA gas suppliers

On 30 August 2022, the Waitsia Joint Venture, Pluto Acceleration, Additional and Scarborough Domestic Gas Commitment Agreements (the Agreements) were tabled in the Western Australian Parliament through the Legislative Council. The Agreements were then tabled in the Legislative Assembly on 20 September 2022. The tabling of these Agreements supports the WA Domestic Gas Policy’s transparency objectives by better communicating information on the domestic gas commitments to the market.

Update to Domestic Gas Policy

In August 2023, the WA Government updated the WA Domestic Gas Policy for the Perth and Canning Basin. 

The update follows the August 2020 update to the WA Domestic Gas Policy, Revised policy to secure domestic gas supply and create jobs, which prevents the export of onshore gas through the existing pipeline network.

To ensure domestic energy security, the WA Government will not consider exemptions from the WA Domestic Gas Policy for onshore gas developments on the existing pipeline network to export LNG, including those in the Perth Basin. Gas from the existing pipeline is for Western Australian industry and consumers only.

For the Canning Basin, these gas resources are not connected to the existing pipeline network and as such a normal application of the WA Domestic Gas Policy applies, which requires gas project developers to make available 15 per cent of exports for the domestic market.

The update to the WA Domestic Gas Policy will safeguard and secure Western Australia’s gas supply and support long-term economic and industrial development in the State.

Read more about the Implementation of the WA Domestic Gas Policy

Tabling of recent domestic gas commitment agreements (August and September 2022) 

On 30 August 2022, the Waitsia Joint Venture, Pluto Acceleration, Additional and Scarborough Domestic Gas Commitment Agreements (the Agreements) were tabled in the Western Australian Parliament through the Legislative Council. The Agreements were then tabled in the Legislative Assembly on 20 September 2022. The tabling of these Agreements supports the WA Domestic Gas Policy’s transparency objectives by better communicating information on the domestic gas commitments to the market.

Domestic gas agreement for Scarborough to Pluto Train 2 LNG project (November 2021)

The WA Government announced domestic gas and other agreements for the Scarborough and Pluto Train 2 LNG projects. 

On 23 November 2021, the State executed the Scarborough Domestic Gas Commitment Agreement and Scarborough Project Development Deed with the Scarborough Joint Venture. The agreements secure domestic gas supply from the Scarborough project, consistent with the WA Domestic Gas Policy, and capture the Scarborough Joint Venture's commitments to regional and Western Australian industry participation, logistics and community development outcomes.

On 23 November 2021, the State executed the Pluto Train 2 Deed with the Pluto Train 2 Joint Venture. The deed supports the implementation of the WA Domestic Gas Policy, ensures domestic gas supply infrastructure is built as part of the Pluto Train 2 development, and captures the Pluto Train 2 Joint Venture's commitments to regional and Western Australian industry participation, logistics and community development outcomes.

Western Australian Gas and Downstream Opportunities Study (July 2021)

Commissioned by the Western Australian Government, and undertaken by ACIL Allen, the independent study investigates opportunities and barriers for establishing new downstream gas processing industries in WA. 

The study was a priority initiative of the LNG Jobs Taskforce. Announced by the Premier in 2018, the taskforce brings together industry, government and unions with the shared vision of establishing Western Australia as a global LNG hub, creating opportunities for investment, innovation and new jobs in the industry.

The WA Government will consider the objectives and needs for new downstream processing projects through project facilitation activities, infrastructure support and the WA Domestic Gas Policy approvals.

Domestic gas agreements for North West Shelf backfill projects (January 2021)

The WA Government announced domestic gas and other agreements for the Waitsia Gas Project Stage 2 and Pluto Acceleration Project. The projects help fill available capacity at the North West Shelf Project’s facilities in the short term.

On 23 December 2020, the State executed the Waitsia domestic gas commitment agreement and Project Development Deed with the Waitsia Joint Venture.

On 27 January 2021, the State executed the Pluto Acceleration domestic gas agreement with Woodside for the processing of Pluto gas at the North West Shelf LNG facilities, as well as the Pluto Site Deed and Additional domestic gas agreement. 

A (summary of the local content, industry participation and community development benefits from the Pluto Acceleration Project (including the associated Interconnector project) can be found here.

National Gas Reservation Issues Paper (October 2020)

On 27 October 2020, the Australian Government released an issues paper on a prospective national gas reservation scheme. In our submission on 27 November 2020, we advised that the WA Domestic Gas Policy is working effectively and should not be disturbed if any national scheme is implemented. Our submission can be found here.

Changes to WA Domestic Gas Policy (August 2020)

On 17 August 2020, the State Government announced changes to the WA Domestic Gas Policy. 

The changes are intended to secure local gas supply, prevent the export of WA gas to the eastern states or overseas and improve transparency in the sector.

The Australian Domestic Gas Security Mechanism (June 2017)

The Australian Government introduced legislation in 2017 that allows it to implement export controls in the event of gas supply shortfalls in the eastern Australian market. The WA gas market is not connected to the east coast and long term contractual arrangements with WA LNG exporters ensure gas is available for WA consumers.

We wrote to the Australian Government about the Australian Domestic Gas Security Mechanism in June 2017. On 27 June 2017, the Commonwealth Minister for Resources clarified that Western Australian LNG exporters will not be subject to export controls in the event of a supply shortfall on the east coast.

Our letter and the response can be found here.