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www.dmirs.wa.gov.au DOMESTIC GAS SUPPLY OUTLOOK AUGUST 2019 Geological Survey of Western Australia Government of Western Australia Department of Mines, Industry Regulation and Safety Western Australia has been producing natural gas since 1971. Currently, domestic gas (domgas) consumption is around 1000 TJ/d Western Australia’s gas market Western Australia is the largest domestic consumer in Australia, Ÿ accounting for 38% of national gas consumption Western Australia is very reliant on gas as a fuel for electricity generation Ÿ Almost half of the domestic gas is used for electricity generation. Industrial Ÿ and mining use accounts for 51%, with residential and other uses 4% There are a limited number of gas pipelines and interconnections with little Ÿ surplus transportation capacity Gas-powered generation dominates Western Australia’s electricity Ÿ generation at 55%. In contrast, 63% of the nation’s electricity was generated by coal Domestic gas reservation in Western Australia Summary The Government’s domestic gas policy requires liquid natural gas (LNG) Ÿ exporters to make gas, equivalent of 15% of their LNG exports, available to the domestic market It does not force producers to supply gas if the market is well supplied for a Ÿ time. Unsold gas is reserved for when market conditions change The Department of Jobs, Tourism, Science and Innovation (JTSI) supports Ÿ the Minister for State Development in administering the domestic gas policy The Department of Mines, Industry Regulation and Safety (DMIRS) Ÿ provides information and advice to JTSI on matters relating to gas reserves and resources, particularly in relation to adequacy of the reserves and resources for domestic gas supply The Western Australia Domestic Gas Policy aims to secure the State's Ÿ long-term energy needs by ensuring that LNG producers also make gas available to the domestic gas market Australian Energy Market Operator expects growth in Western Australia’s Ÿ gas demand to remain relatively low over the next decade Existing supply sources are likely sufficient to keep the domestic market Ÿ adequately supplied until mid-2020s, after which new resources will be required Additional gas supply could come from new obligations under the State's Ÿ Domestic Gas Policy for LNG producers, such as Scarborough and Browse, tolling gas through the North West Shelf or Pluto LNG facilities, the implementation of Pluto LNG project's full domestic commitments, or development of additional reserves by domestic only producers Petroleum exploration activities are at a very low level. Investment in Ÿ exploration and development of new resources need to occur in time to ensure gas demand is met Domestic gas piplines and nameplate capacity Coal 27% Natural gas 55.5% Oil 10% Hydro 0.5% Other renewables 7% Western Australia’s electricity generation fuel mix (2017) VIC 19% QLD 21% WA 38% SA 9% NSW 9% TAS 1% NT 3% Gas consumption in Australia (2016–17) Source: Australian Energy Update, 2018, Department of the Environment and Energy Source: Australian Energy Update, 2018, Department of the Environment and Energy Source: Australian Energy Market Operator, 2018 Residential and commercial 3% Other 1% Gas powered generation 45% Industrial 26% Mining 25% Gas consumption in Western Australia (2016–17) PEP Nameplate: 166 TJ per day TGP Nameplate: 29 Tj per day GGP Nameplate: 202.5 TJ per day MWP Nameplate: 10.6 TJ per day KKP Nameplate: 29.3 TJ per day KEP Nameplate: 6 TJ per day PGP Nameplate: 65.4 TJ per day DBNGP Nameplate: 845 Tj per day FRGP Nameplate: 26 TJ per day Telfer Karratha Dampier Pilbara Goldfields Midwest Kalgoorlie Metro Parmelia Southwest Abbreviations: DBNGP, Dampier to Bunbury Natural Gas Pipeline; FRGP, Fortescue River Gas Pipeline; GGP, Goldfields Gas Pipeline; KEP, Kambalda to Esperance Pipeline; KKP, Kalgoorlie to Kambalda Pipeline; MWP, Midwest Pipeline; PEP, Pilbara Energy Pipeline; PGP, Parmelia Gas Pipeline; TGP, Telfer Gas Pipeline Domestic gas supply and demand forecast 0 200 400 600 800 1000 1200 1400 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 TJ/day Domgas only producers* Domgas from LNG producers AEMO Demand (Base) + trend AEMO, Australian Energy Market Operator; domgas, domestic gas * Includes Waitsia Stage 1 expansion, but excludes Waitsia Stage 2 expansion AEMO Demand (High) + trend Domestic gas processing facilities Domestic gas processing facility Nameplate capacity (TJ/d) Historical peak production (TJ/d) Operator Basin Beharra Springs Devil Creek Dongara Xyris Varanus Island Macedon Red Gully Karratha Gas Plant (NWS) Gorgon* Wheatstone Total Domestic gas only facility LNG linked 19.6 Santos Santos Beach AWE BHP Energy Resources Woodside Chevron AWE Chevron Perth Perth Perth Carnarvon Carnarvon Carnarvon Perth Carnarvon Carnarvon Carnarvon 220 7 10 10 360 220 220 10 630 300 200 16.3 146.5 2.0 10 10 274.4 220.7 8.6 604.6 181.9 1976.6 1465.0 N/A Current long-term domestic gas arrangements * Excludes domestic gas to be supplied by the North West Shelf under contracts prior to the 2015 agreement and third-party tolling Project/ Operator LNG capacity (Mtpa) Domestic gas obligation (PJ) Indicative commitment (TJ/d) Gorgon Chevron Pluto Woodside Wheatstone Chevron North West Shelf * Woodside 15.6 4.9 8.9 16.9 2000 450 1600 660 300 (split into two 150 TJ/d tranches) 115 200 90 Supply from the second tranche is expected by 2021 * Gorgon domestic gas is being marketed in two 150TJ/d tranches. The first tranche has been contracted and is being supplied.

Domestic Gas Supply Outlook Aug2019 98x200 · Gorgon Chevron Pluto Woodside Wheatstone Chevron North West Shelf * Woodside 15.6 4.9 8.9 16.9 2000 450 1600 660 300 (split into two

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  • www.dmirs.wa.gov.au

    DOMESTIC GAS SUPPLYOUTLOOK

    AUGUST 2019

    Geological Survey ofWestern Australia

    Government of Western AustraliaDepartment of Mines, Industry Regulation and Safety

    Western Australia has been producing natural gas since 1971.Currently, domestic gas (domgas) consumption is around 1000 TJ/d

    Western Australia’s gas marketWestern Australia is the largest domestic consumer in Australia, Ÿaccounting for 38% of national gas consumption

    Western Australia is very reliant on gas as a fuel for electricity generation Ÿ

    Almost half of the domestic gas is used for electricity generation. Industrial Ÿand mining use accounts for 51%, with residential and other uses 4%

    There are a limited number of gas pipelines and interconnections with little Ÿsurplus transportation capacity

    Gas-powered generation dominates Western Australia’s electricity Ÿgeneration at 55%. In contrast, 63% of the nation’s electricity was generated by coal

    Domestic gas reservation in Western Australia

    Summary

    The Government’s domestic gas policy requires liquid natural gas (LNG) Ÿexporters to make gas, equivalent of 15% of their LNG exports, available to the domestic market

    It does not force producers to supply gas if the market is well supplied for a Ÿtime. Unsold gas is reserved for when market conditions change

    The Department of Jobs, Tourism, Science and Innovation (JTSI) supports Ÿthe Minister for State Development in administering the domestic gas policy

    The Department of Mines, Industry Regulation and Safety (DMIRS) Ÿprovides information and advice to JTSI on matters relating to gas reserves and resources, particularly in relation to adequacy of the reserves and resources for domestic gas supply

    The Western Australia Domestic Gas Policy aims to secure the State's Ÿlong-term energy needs by ensuring that LNG producers also make gas available to the domestic gas market

    Australian Energy Market Operator expects growth in Western Australia’s Ÿgas demand to remain relatively low over the next decade

    Existing supply sources are likely sufficient to keep the domestic market Ÿadequately supplied until mid-2020s, after which new resources will be required

    Additional gas supply could come from new obligations under the State's ŸDomestic Gas Policy for LNG producers, such as Scarborough and Browse, tolling gas through the North West Shelf or Pluto LNG facilities, the implementation of Pluto LNG project's full domestic commitments, or development of additional reserves by domestic only producers

    Petroleum exploration activities are at a very low level. Investment in Ÿexploration and development of new resources need to occur in time to ensure gas demand is met

    Domestic gas piplines and nameplate capacity

    Coal27%

    Natural gas55.5%

    Oil10%

    Hydro 0.5%Other renewables 7%

    Western Australia’s electricity generation fuel mix (2017)

    VIC19%

    QLD21%

    WA38%

    SA9%

    NSW9%

    TAS 1% NT 3%

    Gas consumption in Australia (2016–17)

    Source: Australian Energy Update, 2018, Department of the Environment and Energy

    Source: Australian Energy Update, 2018, Department of the Environment and Energy

    Source: Australian Energy Market Operator, 2018

    Residential andcommercial

    3%

    Other 1%

    Gas poweredgeneration

    45%

    Industrial26%

    Mining25%

    Gas consumption in Western Australia (2016–17)

    PEP

    Nameplate: 166 TJ per day

    TGP

    Nameplate: 29 Tj per day

    GGP

    Nameplate: 202.5 TJ per day

    MWP

    Nameplate: 10.6 TJ per day

    KKP

    Nameplate: 29.3 TJ per day

    KEP

    Nameplate: 6 TJ per day

    PGP

    Nameplate: 65.4 TJ per day

    DBNGPNameplate: 845 Tj per day

    FRGP

    Nameplate: 26 TJ per day

    TelferKarratha

    Dampier

    Pilbara

    Goldfields

    Midwest

    Kalgoorlie

    MetroParmelia

    Southwest

    Abbreviations: DBNGP, Dampier to Bunbury Natural Gas Pipeline; FRGP, Fortescue River Gas Pipeline; GGP, Goldfields Gas Pipeline; KEP, Kambalda to Esperance Pipeline; KKP, Kalgoorlie to Kambalda Pipeline; MWP, Midwest Pipeline; PEP, Pilbara Energy Pipeline; PGP, Parmelia Gas Pipeline; TGP, Telfer Gas PipelineDomestic gas supply and demand forecast

    0

    200

    400

    600

    800

    1000

    1200

    1400

    2018

    2019

    2020

    2021

    2022

    2023

    2024

    2025

    2026

    2027

    2028

    2029

    2030

    2031

    2032

    2033

    2034

    2035

    2036

    2037

    2038

    TJ/

    day

    Domgas only producers*Domgas from LNG producers

    AEMO Demand (Base) + trend

    AEMO, Australian Energy Market Operator; domgas, domestic gas

    * Includes Waitsia Stage 1 expansion, but excludes Waitsia Stage 2 expansion

    AEMO Demand (High) + trend

    Domestic gas processing facilities

    Domestic gasprocessing facility

    Nameplate capacity

    (TJ/d)

    Historical peak

    production (TJ/d)

    Operator Basin

    Beharra Springs

    Devil Creek

    Dongara

    Xyris

    Varanus Island

    Macedon

    Red Gully

    KarrathaGas Plant

    (NWS)

    Gorgon*

    Wheatstone

    Total

    Domestic gasonly

    facility

    LNGlinked

    19.6

    Santos

    Santos

    Beach

    AWE

    BHP

    EnergyResources

    Woodside

    Chevron

    AWE

    Chevron

    Perth

    Perth

    Perth

    Carnarvon

    Carnarvon

    Carnarvon

    Perth

    Carnarvon

    Carnarvon

    Carnarvon

    220

    7

    1010

    360

    220220

    10

    630

    300

    200

    16.3

    146.5

    2.0

    1010

    274.4

    220.7

    8.6

    604.6

    181.9

    1976.6 1465.0

    N/A

    Current long-term domestic gas arrangements

    * Excludes domestic gas to be supplied by the North West Shelf under contracts prior to the 2015 agreement and third-party tolling

    Project/ Operator

    LNG capacity (Mtpa)

    Domestic gas obligation

    (PJ)

    Indicative commitment

    (TJ/d)

    GorgonChevron

    PlutoWoodside

    WheatstoneChevron

    North West Shelf *Woodside

    15.6

    4.9

    8.9

    16.9

    2000

    450

    1600

    660

    300(split into two

    150 TJ/d tranches)

    115

    200

    90

    Supply from the second tranche is expected by 2021* Gorgon domestic gas is being marketed in two 150TJ/d tranches. The first tranche has been contracted and is being supplied.