Woodside Energy locks in big boost for WA gas supplies starting May 1

Woodside will pump an extra 50 terajoules of gas daily into the local market starting next week in a move that could help avert a shortage in WA this year.

The level is close to 5 per cent of WA demand.

Alarm bells rang in December when the Australian Energy Market Operator warned Western Australia would face a deficit of 56tj/d in 2024, and almost double that amount in 2025.

The pressure has since partly eased amid a series of industrial shutdowns hitting nickel and alumina.

Woodside will fully fill all requests lodged in a recent expression of interest process, executive vice president Mark Abbotsford said.

“We have always said that Woodside is willing to play our part,” he said.

“Flexibility in the WA Domgas Policy enables producers to adjust their supply in response to market conditions.

“And this is exactly what Woodside is doing.”

Woodside will pump more gas from Pluto through the Karratha domestic plant, and bring forward an equity commitment for North West Shelf Venture gas.

The Karratha plant is the State’s biggest — capable of supplying more than half of demand — but has been far below capacity as old gas fields deplete.

Woodside had been in discussions with the State Government prior to a parliamentary inquiry into local gas. The inquiry’s interim report called for an industry-led solution ahead of intervention.

Mr Abbotsford said gas from the Scarborough project will be put to market next year.

That project will be able to supply about 20 per cent of local demand starting in 2026. A good portion has been signed on for Perdaman’s under-construction urea project on the Burrup Peninsula.

The boost for local energy users comes amid heated debate about the volume of gas flowing from major export projects into the domestic market.

On Sunday, Premier Roger Cook pushed big companies with offshore gas fields to “do something” to bring the fuel to market.

A series of big producers want retention licences for offshore fields which will give them up to 15 years to develop projects — based on the argument that development is not yet commercially viable.

That has led to concerns the gas will not be brought online quickly enough.

WA faces a major shortfall by the end of decade.

Treasurer Rita Saffioti said major projects had been hit by cost structure changes in the past three to four years which would mean a period of adjustment.

“These are big capital intensive industries,” Ms Saffioti said on Monday.

“Their projects are worth billions of dollars.

“We need to make sure there’s a right incentive for people to develop.”