PERTH (miningweekly.com) – The Western Australian Chamber of Minerals and Energy (CME) this week welcomed the state government’s introduction of the Natural Gas (Canning Basin Joint Venture (JV)) Agreement Bill.

The Bill ratified the Canning Basin JV signed by the state government with partners Buru Energy and Mitsubishi Corporation.

Premier and State Development Minister Colin Barnett said the vast onshore gas resources of Canning basin would be developed under the provisions of the Bill, which was read into State Parliament on Wednesday.

“This legislation will bring about the continued exploration for natural gas in the remote Canning basin, the development of a gas pipeline to the Pilbara and ensure Western Australian consumers have first use of any gas discovered,” he said.

The US Energy Information Administration estimated the Canning basin unconventional gas resource at about 229-trillion cubic feet, which was about one-and-a-half times Western Australia’s currently identified offshore resource.

The Canning basin covers 530 000 km² stretching from the coast between Port Hedland and Broome, to the state’s eastern border. The gas resources in this arid area were located between 2 km and 4 km below surface.

As the gas was located onshore, it was entirely owned by the state government.

“Tapping this vast resource will guarantee Western Australia’s domestic gas supplies well into the future.

“This agreement ensures gas discoveries are rapidly brought into production, and that gas is delivered to the state’s domestic gas network, before any is exported,” Barnett said.

Barnett noted that, once the domestic gas project was under development, the agreement provided for potential future gas supply for export.
 
The Premier said the agreement provided additional security of tenure for 17 000 km² covered by five exploration permits held by the JV. These permits anchor the JV’s Canning Basin domestic gas project, with the agreement facilitating further targeted gas exploration in these permits and the development of a pipeline to transport gas south to existing industrial areas.

If commercially viable gas resources are discovered by mid-2016, the partners would 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.

Under the agreement, the partners were still required to obtain relevant state and commonwealth environmental, safety, Aboriginal heritage and Native Title approvals for their exploration, development and infrastructure proposals.

The CME this week said the introduction of the Bill was an important step in the development of a new emerging and vital segment of the Western Australian resources sector.

“Western Australia has a very significant onshore natural gas resource, which, with further exploration and development, will deliver new employment and business opportunities for Western Australians, in particular local Aboriginal communities.

“Developments in the Canning basin region will make a substantial and ongoing contribution to improving economic, environmental and social outcomes in the Kimberley region,” said CME CEO Reg Howard-Smith.