The Australian Energy Market Operator (AEMO) has warned of potential gas shortage in Western Australia (WA) from 2020 in an assessment of the WA domestic gas market for the outlook period between 2018 and 2027.

The 2017 Western Australia Gas Statement of Opportunities (WA GSOO) report noted that there are ample supplies to serve the domestic gas market until 2020.

According to the report, new wholesale contracts will be needed to ward off a tightening of supply beyond this period.

“If the government was to impose a permanent ban, the impact on future gas supply could be significant.”

The domestic gas market demand in Western Australia has grown over the last four years from 985TJ to 1,029TJ a day.

AEMO managing director and CEO Audrey Zibelman said: “Our base case scenario forecasts have highlighted a tightening of the market from around 2021-2023 as supply contracts begin to expire and some existing domestic gas facilities face reserve depletion.

“While Western Australia’s domestic gas policy ensures gas availability for domestic consumption in the long-term, the commercial terms of supply are left to the market to negotiate, which includes price and timing.

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“This means there is some uncertainty around the timing of gas reserved from LNG projects supplying the domestic gas market in the medium term.”

Urging the government to take note of the report and intervene with policy measures, APPEA WA chief operating officer Steadman Ellis said: “Exploration for shale gas has stopped in WA due to the existing moratorium on hydraulic fracturing.

“If the government was to impose a permanent ban, the impact on future gas supply could be significant.”

The industry body has called for expediting the current scientific inquiry into the exploration of onshore resources using hydraulic fracturing in WA.

There is currently a moratorium on hydraulic fracturing in the state.