Beach Energy: Ryan Stokes repeats warning on red tape delays

Wednesday at 02:14 AM

Beach Energy chair Ryan Stokes has again taken aim at approval delays amid possible looming energy shortages across the country.

Mr Stokes told Wednesday annual general meeting the industry was “battling ideological rhetoric” which he said was “having detrimental effects on communities, economies and gas supply”.

The market operator rung the alarm earlier this year about a potential winter gas deficit on the east coast — which was avoided — and experts have projected WA could face a supply shortfall over the next decade.

But oil and gas leaders have warned red tape was tying up their ability to bring new production online.

“Gas projects continue to experience extensive and costly delays in the environment plan approvals process,” he said.

“The ambiguity and complexity of these processes have left them open to lawfare by a minority of activists with extreme views, which poses a major risk to new projects and stymies investment decisions.”

Gas projects have been under scrutiny from environmentalists because exports of LNG account for about 8 per cent of national emissions — adding to climate change.

But Mr Stokes said gas could firm up the grid when renewable energy was low.

“The energy transition is complex,” he said.

“We must manage the shift toward greater reliance on renewables with care and consideration.”

He warned power bills would rise without “an appropriate and stable regulatory framework”.

Mr Stokes also slammed the contractor building the $1.2 billion-plus Waitsia gas project in WA’s Mid West, labelling their performance “well below expectations”.

Waitsia is part-owned by Beach and Japan’s Mitsui, with Clough the engineering, procurement and construction contractor.

But the plant has run behind schedule. Gas was first targeted for late 2023 and is now due next year.

“The emergence of significant quality and execution issues across the plant was extremely disappointing,” Mr Stokes said.

“In April we revised our timeline for first gas to early calendar year 2025 and our total capital expenditure estimate to $600-650 million.”

Mr Stokes said quality and execution issues had been addressed since then and the plant is now “effectively constructed”.

He said 15 senior Beach staff were being seconded to the site and the company was controlling some commissioning activities.

Clough’s shock collapse in late 2022 left a series of projects hanging in the balance until the famed Perth-based business was rescued by Italian giant Webuild.

About half the gas from Waitsia will be exported through the North West Shelf Venture’s Karratha plant for five years after the State Government gave the project the first exemption from domestic gas rules.

Shares in Beach sunk 0.6 per cent to $1.24 in early trade.

Production fell 7 per cent on the previous financial year and underlying profit dropped 11 per cent to $341m.

Beach is partially owned by Seven Group Holdings, a key stakeholder in West Australian Newspapers Limited, publisher of The West Australian and The Nightly.

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