In Resources

Western Australia Premier Colin Barnett

Western Australia Minister for State Development Colin Barnett

Canning Basin Development Bill Passed

Victor P Taffa

  • New legislation paves the way for development of Canning Basin gas
  • Will ensure gas supplies for State’s future energy needs

Western Australia has taken another step towards tapping the vast underground gas resources of the Canning Basin.

Legislation allowing the development of the region’s gas resources was passed by State Parliament last night.

Premier and State Development Minister Colin Barnett said the legislation was an important step in opening up the onshore Canning Basin, which had the potential to make a significant long-term contribution to Western Australia’s economy and stimulate economic growth.

Premier Barnett said the gas reserves were located between 2 and 4 km below ground and had the potential to meet future domestic gas market requirements.

The legislation allows for the onshore gas resources to be developed under the provisions of the Natural Gas (Canning Basin Joint Venture) Agreement, signed by the State Government with joint venture partners Buru Energy Limited and Mitsubishi Corporation.

“Tapping this vast resource will guarantee WA’s domestic gas supplies well into the future.” the Premier said.

“The gas is owned entirely by the State Government, and this agreement ensures gas discoveries are rapidly brought into production, and that before any gas is exported it is delivered to West Australians through the State’s domestic gas network.”

Once the domestic gas project is under development, the agreement provides for potential future gas supply for gas export.

Premier Barnett said shale gas had already transformed the energy situation in the US.

The US Energy Information Agency (EIA) EIA estimated the onshore Canning Basin may contain 229 trillion cubic feet of shale gas resources without taking into account additional tight gas resources. This is almost double WA’s known offshore gas resources and is the largest shale or unconventional gas accumulation in Australia.

Natural gas provides about 50 % of the State’s domestic electricity generation, and contributes to the production of key resource exports including iron ore, alumina, base metals and gold.

The Premier said the agreement provided additional security of tenure for 17,000 sq km (1.7 Million ha) covered by five exploration permits held by the joint venture. These permits anchor the joint venture’s Canning Basin Domestic Gas Project.

Premier Barnett said the joint venture partners would be required to negotiate with traditional owners and seek the relevant environmental and native title approvals for the project.

If commercially viable gas resources are discovered, by mid-2016 the partners will be required to submit a plan for construction of the domestic gas project, including a pipeline connecting to the existing State gas network in the Pilbara.

Fact File

The agreement, which is for an initial term of 25 years, with a possible 25 year extension, will:

  • Encourage investment in a significant exploration and evaluation program to determine the technical and economic viability of the natural gas resources
  • Enable the Government to set firm timetables for development of gas discoveries
  • Ensure an amount equivalent to 15% of any gas processed for export is reserved for domestic use
  • Make available for sale related products such as ethane, propane, butane and condensate, for the possible manufacture of chemicals or use as transport fuel
  • Defer relinquishment conditions of the Petroleum and Geothermal Energy Resources Act 1967 for five key permits
  • Facilitate the development of pipelines and other infrastructure to deliver gas to the State’s domestic gas network
  • Require the joint venture to obtain relevant State and Commonwealth environmental, safety, Aboriginal heritage and native title approvals for their exploration, development and infrastructure proposals

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