Western Australia gas market tighter: Strike Energy

Market: Natural gas
25/10/23

The gas market in Western Australia (WA) tightened over the July-September quarter as the region continued to rely on gas-fired power generation with coal-fired power generation lagging, Australian independent Strike Energy has said.

Electricity demand from WA had picked up over the quarter, likely on seasonal winter requirements, lifting the demand for gas-fired power generation, Strike Energy said in its quarterly update, as part of a stock exchange filing published on 25 October. The reduced efficiency of the aging coal fleets in the region likely also kept gas-fired power generation high at 70-90pc capacity over the quarter.

Given that there is a lack of new baseload gas-fired power generation or gas supply, the shutdown of the second 200MW Muja C unit at the Muja power station had to be pushed back to April 2025 from the originally planned October 2024, the company said. This is to avoid a potential power shortfall.

The WA state government has targeted to shut all its remaining state-owned coal-fired power plants by 2030.

Strike had produced their first saleable gas from the 33 TJ/d (884,000 m³/d) Walyering gas project in Western Australia's (WA's) Perth basin on 26 September, since its initial pushback of first gas for second quarter 2023. The project started stable production of gas at 20 TJ/d (534,000 m³/d) on 1 October, as previously scheduled.

Strike in August reached an agreement to acquire Australian-listed exploration company Talon Energy, its 45pc joint venture partner in Walyering, but Strike has said the transaction is not expected to complete until December.

Regulators are anticipating a tight WA gas market from 2023 until 2026 and again from 2030 onwards, leading the Australian state to clamp down on export activity.

By Naomi Ong

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