Key facts
- Woodside Energy's decision on new domestic gas wells in the Gippsland basin is contingent on the design of Australia's new gas reservation scheme.
- The scheme, set to start July 1 next year, mandates LNG exporters reserve 20% of shipped volumes for the domestic market.
- Woodside plans to assume operatorship of the Gippsland basin joint venture from ExxonMobil this year.
- The company identified four development targets that could deliver up to 200PJ of sales gas.
- Consultation on the reservation scheme closes June 30.
Woodside Energy's decision on whether to proceed with drilling new domestic gas wells in Australia's Gippsland basin is dependent on the final design of the federal government's new gas reservation scheme. Chief executive Liz Westcott stated that the plan hinges on both technical maturity and the policy settings of the scheme, which is currently open for public comment.
Woodside has identified four development targets within its Bass Strait assets, including the Gippsland basin joint venture (GBJV), which could deliver up to 200PJ of sales gas. The company is set to assume operatorship of the GBJV from ExxonMobil this year. The GBJV assets include the Longford gas plants and the Long Island Point gas liquids terminal.
The federal gas reservation program, scheduled to begin on July 1 next year, will require LNG exporters to set aside 20% of their shipped volumes for the domestic market. Australia has committed to respecting existing term supply contracts signed before this year. The government aims to prevent potential shortfalls later this decade due to inadequate gas planning.
Woodside's eastern states assets do not export gas; its LNG exports come from its North West Shelf and Pluto terminals on the west coast. Western Australia's government has indicated its 15% reservation scheme aligns with federal goals. Consultation on the national scheme concludes on June 30, with further program development scheduled for July to December. The uncertainty surrounding the reservation scheme is reportedly impacting foreign investment in Australia's LNG sector and raising concerns about future supply from domestic producers.