There is a backlog of potential new downstream industries hungry for gas, including a second ammonia urea plant, iron ore processing, ammonia nitrite, mini-LNG for local domestic market to name a few.

The problem is they cannot find gas suppliers who will supply them the gas. Or if they can find a gas supplier, the supplier wants inflated prices in the range of $8-10 dollars a gigajoule.

These industries are not looking for free or cheap gas, but gas at a reasonable price that reflects the cost of development and provides the developer with a reasonable profit.

There are gas discoveries out there that have sufficient reserves which with reasonable development plans could supply these downstream industries with the energy they need to get started and provide value adding downstream products.

Bountiful waiting gas discoveries and the lack of movement on working with downstream customers indicates that maybe some oil companies see more lucrative markets for their gas overseas, and I suppose why not, they have shareholders to satisfy.

But the Government also has to balance this with needs to grow and satisfy domestic demand. God help the government in power if the lights of WA go out and the wheels of industry stop, yet Japan and China continue to receive gas supplies.

Nicholas Betts

Business development manager - oil & gas

Clough