THE COMMITTEE for Economic Development of Australia forum on the Varanus Island gas explosion in Perth has been told Western Australia could be vulnerable to energy crises over the next ten years.
Keith Spence, a former Woodside Petroleum executive, told the forum that the state would remain dependent on a small number of gas hubs well into the next decade.
The 3 June incident cut the state’s gas supply by 34% and increased its dependence on the Woodside-operated North West Shelf Venture (NWSV) near Karratha. The West Australian Chamber of Commerce says the explosion drained about $2.4b from the economy and also led to reports of profiteering, allegations of cover ups and unique challenges for particular industries.
Although the plant’s operator Apache Energy has been able to restore partial output ahead of schedule, full production is not expected to resume until December. The company has slammed criticisms made by the National Offshore Petroleum Safety Authority (NOPSA).
According to Spence, there are no quick fixes for WA's energy security in the future.
He says Apache's Devil Creek natural gas hub near Dampier, slated to begin production in 2010, could provide a third of the state’s supply by 2012 and then 20% in 2015.
LNG projects, such as Woodside's Browse Basin, Chevron's Gorgon and Inpex's Ichthys developments, could also become other prime sources of domestic gas.
Spence says large LNG developments offered an economy of scale which allows developers to provide domestic gas without denting their earnings. It is more lucrative for these companies to export LNG.
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