Japan's Mitsui cleared to export gas from West Australian project

Japan’s Mitsui & Co won an exemption from the Western Australian government to export gas from a new onshore field, in a push to jump start the project and help the state’s recovery from the coronavirus pandemic.

Western Australia said it would ban all exports of onshore gas in a bid to hold down gas prices in the state, effectively ruling out a west-to-east pipeline to help the country’s eastern states overcome a looming gas supply crunch.

However the state said it would allow half the gas from Mitsui’s Waitsia Stage 2 project to be exported as LNG through the North West Shelf LNG plant “for a short period of time”, to help get the project started.

“Once sanctioned, it will provide urgently needed jobs, royalties and economic stimulus for the region and the State,” state premier Mark McGowan said in a statement.

Analysts estimated Waitsia, one of Australia’s five largest onshore gas discoveries over the past 40 years, would export 1.5 million tonnes a year of LNG for about seven years.

Mitsui E&P Australia welcomed the certainty that the export exemption provided the project but had no further comment.

A pandemic-led oil price crash has led to the deferral of other major gas developments off Western Australia that were due to feed the NW Shelf LNG plant, Australia’s oldest and largest LNG project, as its foundation fields dry up.

The delays have cleared the way for Waitsia gas to supply the plant. Mitsui’s partner Beach Energy said they aim to reach a final investment decision on Waitsia in the December quarter this year, targeting first production by late 2023.

The NW Shelf LNG venture said on Monday it had reached preliminary tolling agreements to process gas from Waitsia as well as Woodside Petroleum’s Pluto offshore project.

Gas from Pluto could start going into the NW Shelf plant from 2022.

Reporting by Sonali Paul; Editing by Richard Pullin

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