Mining and minerals processing to drive WA gas demand spike
Recently the WA Domestic Gas Alliance commissioned a report that claims the state government should focus on supporting development and ensuring the 15% supply obligation is adhered to by LNG producers.
The states domestic gas market continues to be well supplied but faces the possibility of change as supply is forecast to tighten in the middle of the decade, following a steep increase around 2025.
The report, produced and written by Wood Mackenzie, highlighted that gas demand in WA was 1068 terajoules per day in 2020. With this statistic in mind the breakdown of sectors demonstrates that manufacturing inherits the largest share of 33%, alumina and industrial at 21%, down the chain to only 12% used for the states power and 4% for residential and commercial purposes.
The demand in supply will lead to multiple new projects potentially being developed, including three lithium refineries.
The report makes comment that existing facilities that are on the noticeable decline should be utilised over greenfield development, however gas does need to be developed now in order to supply the higher industrial demands.
If producing is left to 2030 gas resources are more than likely to remain in the ground.
“Domestic Gas Commitment holders should be given a limited time frame – no more than three years – to market the gas still unsold under the 15% reservation policy,” the report said.
“There are still large volumes of commitment gas that have not been brought to market and the government should ensure this gas is not left in the ground,” stated the report.