On 7 November 2012 the State of Western Australia entered a
joint venture agreement with Buru Energy Limited, Diamond Resources
(Fitzroy) Pty Ltd, Diamond Resources (Canning) Pty Ltd and
Mitsubishi Corporation (as guarantor) (the Agreement).
The Natural Gas (Canning Basin Joint Venture) Agreement Bill
2013 (the Bill) ratifies and authorises the implementation of
the Agreement. The Bill has been introduced, and received its first
and second reading in the Legislative Assembly on 8 May 2013.
The Bill marks a new chapter in unconventional gas exploration,
with the key purposes including:
to encourage accelerated investment in exploration and
evaluation of the natural gas resources in the Canning Basin.
to promote industrial development in Western Australia
to create security by giving preference to domestic gas market
demand over export.
to facilitate the development of pipelines and other
infrastructure to deliver gas to the domestic gas network.
The Bill does not affect the rights of Canning Basin exploration
tenement holders or applicants who are not party to the
The Agreement is for an initial term of 25 years, with a
possible extension of 25 years and provides for the evaluation,
development and exploitation of natural gas resources in the
Canning Basin region. The Agreement initially applies within the
area of five exploration permits (E 371(R1), 391(R2), 428, 431,
436) which cumulatively equate to 17,000km2 of tenure.
These exploration permits are geographically located between Broome
and Fitzroy Crossing.
The Agreement provides that if commercially viable gas is
discovered by mid 2016, the parties must submit a plan for
construction of the domestic gas project, which will include a
600km pipeline south to Western Australia's existing Pilbara
gas network. Meeting domestic market demand has priority over
exports under the Agreement (in accordance with the State's
policy published in August 2012 in the Strategic Energy Initiative:
The Agreement provides for the use of local labour and materials
as well as the creation and implementation of a community
development plan and local industry participation plan.
Under the terms of the Agreement, the joint venture will still
be required to obtain relevant environmental, health and safety,
heritage and Native Title approvals for the proposed exploration,
development and infrastructure. Such approvals will require close
interaction with overlapping tenure holders, Aboriginal Traditional
Owners and other interested third parties.
Importantly, the Bill confirms the State's power to take any
land considered necessary for the purposes of the Agreement,
excluding port or Dampier to Bunbury Natural Gas Pipeline corridor
areas (which land will be compulsorily acquired under the Land
Administration Act 1997 (WA) on the basis that it is required
for a public work).
In keeping with the Government Agreements Act 1979
(WA), the Bill also ensures that, once enacted, its provisions
will override any other inconsistent enactment or other law.
The operative provisions of the Bill (including the ratification
of the Agreement) commence the day after the Bill receives Royal
The article examines the regulation of the oil and gas industry and breaks down the regulatory process state by state.
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