Fortescue Metals Group is expected to use its transition from a reliance on diesel power to becoming one of the State's biggest gas users by urging the Federal Government to enforce a 'use it or lose it' approach to owners of undeveloped gas resources.
It is understood a key plank of Fortescue's push is a call for the enforcement of the Commonwealth's retention lease regime, which already has contributed to the development of the Chevron-led Wheatstone LNG venture.
The key target for Fortescue is likely to be the Woodside Petroleum-led Browse floating LNG project, which includes gas in State waters and still requires WA Government support.
The Woodside consortium is haggling with the State over a domestic gas solution without having to build a pipeline to shore. It is likely the project proponent will suggest a swap, using gas from other projects with existing onshore infrastructure such as Woodside's Pluto to cover any Browse commitment.
A 20 year, 100% take-or-pay gas transportation contract has been signed between the joint venture DBPP Group and the miner, with Fortescue already securing Shipper Rights under the Gas Transportation Agreement.
