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Billions of dollars in critical new gas projects needed to supply up to a fifth of WA’s domestic power are under threat from national reservation laws, according to industry bosses.

In a joint open letter to the Prime Minister, Hancock Energy chief executive Stuart Johnston and Strike Energy managing director Shelley Robertson warned Anthony Albanese of the risk to new developments in the Perth Basin from the Domestic Gas Reservation Scheme.

Onshore projects including Hancock’s $1.5 billion Belisama development and its joint-venture with Strike’s West Erregulla project have the potential to supply up to 20 per cent of the State’s domestic gas demand by the end of the decade.

“The uncertainty created by the proposed DGRS is already undermining the confidence needed to justify decisions to invest in additional gas production and supply,” Mr Johnston and Ms Robertson wrote.

“Projects in Western Australia including Belisama and West Erregulla require substantial long-term capital commitments, and investors must be confident that the regulatory framework will remain stable over the life of those investments.

Billions of dollars in critical new gas projects needed to supply up to a fifth of WA’s domestic power are under threat from national reservation laws, according to industry bosses.

In a joint open letter to the Prime Minister, Hancock Energy chief executive Stuart Johnston and Strike Energy managing director Shelley Robertson warned Anthony Albanese of the risk to new developments in the Perth Basin from the Domestic Gas Reservation Scheme.

Onshore projects including Hancock’s $1.5 billion Belisama development and its joint-venture with Strike’s West Erregulla project have the potential to supply up to 20 per cent of the State’s domestic gas demand by the end of the decade.

“The uncertainty created by the proposed DGRS is already undermining the confidence needed to justify decisions to invest in additional gas production and supply,” Mr Johnston and Ms Robertson wrote.

“Projects in Western Australia including Belisama and West Erregulla require substantial long-term capital commitments, and investors must be confident that the regulatory framework will remain stable over the life of those investments.

“The Bill introduced to implement the DGRS is not required in WA, where the WA State Policy has already demonstrated its effectiveness in securing reliable gas supply at competitive prices.”

The pair warned that calculating domestic supply obligations at 110 per cent of forecast annual gas demand without considering the impacts on price would run the risk of a “short-term flooding of the market” disincentivising new exploration and production.

WA’s existing State policy requires new onshore gas developments to reserve 80 per cent of production for the local market, rising to 100 per cent from 2031.

“Diverting LNG exports into a domestic gas market does not create additional gas supplies,” the letter stated.

“While this may place downward pressure on gas prices in the short term, a DGRS that discourages or delays investment in new gas supply risks undermining the long-term supply response required to meet forecast future demand.

“Over time, reduced investment in domestic gas exploration and development projects is likely to result in tighter supply conditions and increased prices as existing fields mature and decline.

“And with investment in new gas exploration and production at risk, so too are jobs in regional WA and the sustainability of the WA economy.”

The energy bosses took aim at the “significant discretion” handed to Federal ministers and regulators to intervene in the market and a “lack of transparency in decision making”.

They urged the Albanese Government to redraft the legislation to grant WA an outright exemption from the scheme while its State reservation policy continues to remain effective.

If a full carve-out couldn’t be achieved, they called for WA’s Domestic Supply Obligation to be locked in at 0 per cent for 15 years, with changes only if the local market suffers a significant failure or the State policy ceases to apply.

Chamber of Minerals and Energy WA chief executive Aaron Morey also has serious concerns about the proposed policy, and will fly to Canberra on Friday with a five-point wish-list of amendments to protect the State’s gas sector.