PERTH (miningweekly.com) – ASX-listed Mineral Resources (MinRes) this week said that Western Australia’s domestic gas policy could hamper the development of its onshore gas assets.

During the company’s full-year results announcement, MinRes MD Chris Ellison noted that the company’s Energy division had drilled two onshore natural gas discoveries in the Perth basin during the year, and had completed the takeover of Norwest Energy.

“The Energy division made another two natural gas discoveries in the Perth basin. We have enough gas to help the Western Australian domestic market stay in long-term surplus, and to export to the world as liquefied natural gas (LNG), but the significant capital investment required to maximise this potential is being held back by the current Western Australian domestic gas policy,” Ellison said.

The state government last month quietly updated its Domestic Gas Policy for the Perth and Canning basins, preventing the export of onshore gas through the existing pipeline network.

The Department of Jobs, Tourism, Science and Innovation announced that in order to ensure domestic energy security, the Western Australian government would not consider any exemptions from the Domestic Gas Policy for onshore gas developments on the existing pipeline network to export LNG, including those in the Perth basin.

Gas from the existing pipeline wouill be reserved for Western Australian industry and consumers only.

The Canning basin gas resources are not connected to the existing pipeline network and as such a normal application of the Western Australian Domestic Gas Policy applies, which requires gas project developers to make available 15% of exports for the domestic market.

The Sydney Morning Herald quoted Ellison as saying MinRes could potentially produce 300 TJ/d from its field, but 200 TJ/d would need to be exported to pay off debt used to build the facility. The remaining 100 TJ/d will be for local use.

However, the article noted that if the company was unable to get export approval, it would downsize the project to about 50 TJ/d and use the bulk of its output to power its own operations.

During the 2024 financial year, MinRes is planning a feasibility study and front-end engineering work on its Perth basin acreage, and will drill two wells. The company currently holds the largest acreage position in the Perth basin, covering 7 301 km².