NORTH WEST SHELF GAS MARKS 30 YEARS

In late 2009 the North West Shelf gas project celebrated a Western Australian Government decision 30 years ago that secured development of a natural gas supply, and continues to return massive rewards not only to the State, but also to all of Australia.

In 1979, the State Government signed an agreement with the six partners in the North West Shelf Venture that has underpinned a petroleum development project which is valued at more than A$50 billion in current terms. Under the agreement, the State Government committed to building a $450 million, 1500km natural gas pipeline and to a 20-year, take-or-pay contract for more than 400 terajoules of gas per day.

At the time, the $2.5 billion first phase of the North West Shelf (NWS) project was Australia’s largest, most expensive resource development. The project has had an enormous impact, with the introduction of natural gas transforming the Western Australian economy, helping to create tens of thousands of new jobs, fostering new businesses and developing new industries.

Since 1984 when gas first flowed from Dampier to Perth, domestic natural gas consumption has grown by an annual average of seven per cent. At 350 petajoules per year, natural gas consumption is almost 20 times the pre NWS project level. Electricity generation accounts for 46 per cent of this consumption and minerals processing, including alumina, nickel and chemical production, consumes a similar amount.

In addition, with the expansion of oil and gas exploration and production in Western Australia and the accompanying acquisition and development of relevant technology and skills, Perth has become a petroleum sector services centre with a wide range of businesses providing expertise and products to the industry, in both local and overseas markets.

In the 20 years since LNG production began, the NWS project has:
• Earned almost A$60 billion in export revenue
• Increased Australia’s Gross Domestic Product by A$70 billion
• Increased Western Australia’s Gross State Product by A$90 billion or five per cent
• Expanded its annual LNG production capacity from 5 million tonnes to 16.3 million tonnes
• Contributes taxation and royalty benefits totalling A$4 billion a year to the Australian Government
• Contributes A$900 million a year to the State Government and local governments

Currently the North West Shelf Venture provides 65 per cent of Western Australia’s domestic gas, accounts for more than seven per cent of global exports of LNG and produces almost 200,000 barrels of condensate and crude oil per day. With major new LNG and domestic gas developments underway, both Western Australia’s and Australia’s economies are poised for a new and exciting period of development.