The Policy aims to secure WA’s long-term energy needs and ongoing economic development by ensuring that LNG exporters also make gas available for the domestic market.
The Department of Energy and Economic Diversification (DEED) implements, assesses compliance and enforces the Policy on behalf of the WA Government.
The Policy is given effect through long-term agreements executed between the WA Government and LNG exporters, including State Agreements, State Development Agreements and Domestic Gas Commitment Agreements. These agreements are struck prior to project commencement to provide certainty for exporters and transparency for consumers with regard to the volume of domestic gas, ensuring a reliable supply of gas.
The Policy requires LNG exporters to make domestic gas available by:
- Reserving gas equivalent to 15% of LNG production for the WA market.
- Developing and/or obtaining access to the necessary infrastructure to meet their domestic gas commitments.
- Making gas available to existing and prospective customers by demonstrating diligence and good faith in marketing.
Prices and contracts for domestic gas are set by market participants through confidential negotiations.
The Policy only applies once the gas comes onshore to local facilities to be processed into LNG and domestic gas. Projects such as Shell's Prelude and INPEX Ichthys are not captured by the Policy as the gas is processed offshore and in Darwin respectively.
The Policy is applied in a flexible manner to enable LNG exporters to supply domestic gas in response to market conditions. This ensures 15% of LNG production for the domestic market is reserved over the life of the project or agreement not per annum, however exporters are required to market gas with the view to achieving stable and regular supply.
The WA Government regularly reviews the Policy to ensure it remains fit-for-purpose and can support the Government's energy security, energy transition and economic diversification objectives. Further information on the development of the Policy can be found here.
