Western Australia will need significant new gas supplies to fuel its ambitions of becoming a global minerals processing hub and phasing out coal-fired power generation, according to energy research firm Rystad Energy.

In an article published in the Australian Energy Producers Journal, the company stated the case for boosting new gas supply is “extremely strong” given forecast shortfalls that could “reduce the competitiveness of WA’s gas-intensive industries.”

Rystad Energy estimates WA requires 8 to 10 trillion cubic feet (TCF) of gas through to 2050, but the current supply is only projected to cover around 5 TCF.

“In the absence of further supply, this will challenge WA’s ambitions to become a minerals processing hub,” the firm warned.

“The attempt to ensure supply security could lead to coal generation phase-outs in WA being pushed back, which would jeopardise the state and Australia’s interim emissions reduction targets.”

Caroline Cherry, WA Director of Australian Energy Producers, emphasised the need for the right policy settings to encourage investment in developing the state’s gas reserves.

“The state must explore for and develop new gas supplies if it wants to avoid energy market turmoil.

“Streamlining approvals processes is one of the fastest ways to get new gas to market. Lifting the export ban for onshore projects will make more ventures viable and supply more gas to the domestic market,” said Cherry.

The calls for boosting gas supply align with warnings from the Australian Energy Market Operator (AEMO) in December about a decade of shortages in WA due to growing demand driven by gas replacing coal in electricity generation and powering mining operations.

AEMO also upgraded its projected gas demand growth to 2.2 per cent annually over the next decade, up from 1.7 per cent forecast last year.