Goldfields Gas Pipeline Agreement Act 1994

The Act directly binds and benefits four groups.

First, the State of Western Australia (including successive Ministers, the Energy Minister, Minister for Mines and instrumentalities such as the former State Energy Commission) is obliged to introduce ratifying legislation (clause 4), grant the Pipeline Licence and land tenures (clause 16), resume land where required (clause 26), maintain or upgrade public roads (clauses 15(2)–(3)), ensure non-discriminatory access to the Dampier to Bunbury pipeline (clause 17), facilitate associated electricity works (clause 18), zone land appropriately (clause 24), refrain from discriminatory rates or resumption (clauses 25 and 27), and exercise various approval, direction and determination powers throughout the Agreement.

Second, the Joint Venturers (originally Wesminco Oil Pty Ltd, Normandy Pipelines Pty Ltd and BHP Minerals Pty Ltd, their successors and permitted assigns, with Western Mining Corporation Holdings Ltd and Normandy Poseidon Ltd as guarantors under clause 45) bear the primary obligations. They must undertake studies (clause 6), consult on route selection (clause 7), secure Initial Customers and commit Initial Committed Capacity (clause 8), submit detailed proposals within six months of route agreement (clause 9), implement approved proposals within two years (clause 10(7)), use local labour and suppliers to the extent reasonably practicable (clause 13), protect the environment (clause 14), construct and maintain private roads (clause 15), pay licence fees and rentals (clause 16(2)), promote pipeline use and provide non-discriminatory access to uncommitted capacity (clauses 19–20), expand capacity where feasible (clause 20(4)), comply with by-laws and tariff principles (clauses 21–22), maintain ring-fenced accounts (clause 23), and observe the indemnity and other covenants (clauses 35, 46). Their liability is several, limited to percentage interests (clause 3).

Third, Third Parties (any person other than the Joint Venturers acting collectively, including individual Joint Venturers acting outside the joint venture) obtain statutory rights to negotiate non-discriminatory access to uncommitted and Developable Capacity on fair and reasonable terms (clause 20(1)–(2)). They may trigger ministerial determinations if negotiations fail for two months (clause 20(8)–(9)), obtain connections at their cost (clause 20(7)), and benefit from consistent principles applied to the Dampier to Bunbury pipeline (clause 17). Initial Customers enjoy special tariff principles approved at the outset (clause 8(2)).

Fourth, Aboriginal persons and holders of traditional interests are protected by repeated references to “laws relating to traditional usage” which qualify every entry onto land, route selection, proposal approval and land resumption (clauses 6(4), 7, 9(1), 10(1), 11, 12(3), 16(1)). The State must pay compensation for any adverse effects on such interests (clause 16(1)).

Local authorities, the Commissioner of Main Roads, Western Australian Government Railways and environmental regulators are indirectly affected through consultation, road-maintenance and zoning obligations.

Joint Venturers’ duties include: submitting quarterly progress reports (clause 6(2)); cooperating on route selection having regard to engineering, land use and traditional interests (clause 7(1)); inviting expressions of interest from Third Parties using Minister-approved tariff principles (clause 8(2)); submitting comprehensive proposals under clause 9(1) (including pipeline sizing at least 400 mm to Newman then 350 mm to Kalgoorlie or sufficient for Initial Committed Capacity, expandable by 50 %); using local labour, professionals and materials wherever reasonably practicable (clause 13(1)–(2)); continuous environmental monitoring and reporting (clause 14); constructing and maintaining private roads at their cost (clause 15(1)); paying escalated licence fees of the lesser of the statutory fee or $80 per kilometre (1994 dollars) (clause 16(2)); promoting pipeline use (clause 19); offering non-discriminatory access to uncommitted capacity including Developable Capacity (clause 20(1)); expanding capacity where technically and economically feasible having regard to legitimate business interests (clause 20(4),(6)); undertaking lateral connections at Third Party cost subject to technical and security conditions (clause 20(7)); maintaining indicative tariff schedules and separate accounts (clauses 22(3), 23); and reporting contracts to the Minister on request (clause 22(7)).

Rights of the Joint Venturers include: reservation of capacity for their own operations without paying tariffs to each other (clause 8(1)); 42-year Pipeline Licence tenure (clause 16(1)); modification of the Land Act 1933 and Petroleum Pipelines Act 1969 to ease tenure grant (clauses 16(3)–(5)); exemption from Gas Undertakings Act 1947 and training levies (clauses 40–41); stamp-duty relief on the Agreement and related instruments (clause 44); force-majeure relief (clause 30); ministerial extensions of time (clause 31); and arbitration where ministerial decisions on proposals or access are alleged to be unreasonable (clauses 10(4), 20(10)).

State duties include granting tenures on reasonable terms (clause 16(1)), maintaining public roads (clause 15(2)), ensuring consistent access principles for the Dampier to Bunbury pipeline (clause 17(1)), and refraining from discriminatory action (clause 25).

Third Party rights centre on non-discriminatory access, ministerial determination of terms if negotiations stall for two months (clause 20(8)–(9)), and access to indicative tariffs and gas-quality specifications (clause 22(5)).

The Act itself contains limited direct penalties. By-laws made under s. 5 may prescribe penalties not exceeding $1 000 for breach (s. 5(c)). These by-laws must be published in the Gazette, take effect on publication or a later stated date, be laid before Parliament within six sitting days, and are exempt from Interpretation Act 1984 s. 42 (s. 5).

Enforcement of the Agreement is primarily contractual and statutory. Clause 32 allows the State to give 180 days’ notice to remedy a material default or to resume activities abandoned or repudiated; failure permits termination of the Agreement. If the Joint Venturers contest the default they may refer the matter to arbitration within 60 days (clause 32(3)). The State may itself remedy a default and recover costs as a debt (clause 32(4)). On termination, rights under the Agreement cease (subject to antecedent liabilities), the Pipeline Licence continues under the Petroleum Pipelines Act 1969 for its remaining term without Agreement privileges, and the Joint Venturers must pay all accrued moneys (clause 33).

Clause 3 makes obligations joint; proof against one Joint Venturer suffices against all, but monetary liability is several according to percentage interest. Clause 35 contains a broad indemnity in favour of the State for third-party claims arising from the Joint Venturers’ works, subject to exclusions for State negligence and the land-resumption costs in clause 26. Clause 7 of the Act and clause 34 of the Agreement expressly preserve Environmental Protection Act 1986 obligations.

Ministerial directions under clauses 20(5), 20(9) and 17(3) are enforceable; non-compliance can ground a determination notice under clause 32. Accounting records must be produced on request and may be audited (clause 23(3)); misuse of contract information by the Minister is implicitly restrained by the purpose limitation in clause 22(7) and 23(4).

The Act is a classic “notwithstanding” statute. Section 4(3) and clause 5(3) provide that the Agreement operates despite any other Act or law. It expressly modifies or disapplies provisions of multiple statutes:

• Petroleum Pipelines Act 1969: ss. 8(2)–(5) (modified application to proposals), new s. 10 substituted, deletion of ss. 9, 12, 13, 21, 24, 26–28, 11 (for the automatic extension), and amendment of the “pipeline” definition and s. 16 (clause 16(4)–(5)).
• Land Act 1933: substitution of s. 45A(2), deletion of proviso to s. 116, ss. 135 and 143, and insertion of power to grant tenures consistent with the Agreement (clause 16(3)).
• Electricity Act 1945: substitution of “Minister” for “Commission” in multiple sections and deletion of ss. 13(4)–(6), 17, parts of s. 32(1) and s. 43 (clause 18(2)).
• Public Works Act 1902: s. 82 powers for surveys, non-application of s. 33E, and modification of resumption procedures (clauses 6(4), 7(5), 26).
• Local Government Act 1960: valuation on unimproved value for rating, non-application of s. 533B, and confirmation that Joint Venturers are not “gas supply companies” for s. 538 (clause 25(2)–(4)).
• Environmental Protection Act 1986 and “laws relating to traditional usage”: every proposal, approval and land step is “subject to” these laws; approvals must incorporate EP Act conditions (clause 10(1) proviso).
• Freedom of Information Act 1992: no State agency may apply under s. 35 for information supplied under the Agreement (clause 9(6)).
• Commercial Arbitration Act 1985: governs all arbitrations (clauses 10(4), 20(10), 37).
• Building and Construction Industry Training Levy Acts 1990: full exemption (clause 41).
• Gas Undertakings Act 1947: no application to transmission or use of gas by Joint Venturers or associates (clause 40).

Clause 2(f) provides that references to Acts include amendments and replacements, except for the State Energy Commission Act 1979 where subject-matter continuity is preserved. Uniform pipeline laws enacted after 1994 displace the Agreement’s by-laws after two years unless they materially adversely affect legitimate business interests, and in any event apply to Initial Committed Capacity only to the extent it remains unutilised (clause 21(2)–(3)).

The compilation table records only one amendment: the Standardisation of Formatting Act 2010 s. 4, which amended the heading to Schedule 1. That change was part of a general modernisation program across Western Australian statutes to improve readability and consistency of legislative formatting; it had no substantive effect on rights, obligations, access rules or tenure. No other amendments appear. The Agreement’s internal variation mechanism (clause 29) allows the parties to vary its terms by written agreement laid before Parliament, subject to disallowance. Clause 3(2) of the Act permits the Governor to amend the Act by Gazette order to insert a copy of any further agreement. No such order or variation has been recorded in the provided text. The absence of substantive amendment over nearly three decades reflects the Agreement’s success in locking in a stable long-term regulatory bargain that has not required legislative updating.

The legislation itself contains no reported court challenges. Clause 37 mandates arbitration under the Commercial Arbitration Act 1985 (with legal representation permitted) for any dispute “arising out of or in connection with this Agreement” except where a Minister is given express or implied discretion. Clause 10(4) permits the Joint Venturers to arbitrate ministerial decisions on proposals that they consider unreasonable (but not EP Act or traditional-usage conditions). Clause 20(10) allows arbitration where the Joint Venturers believe a ministerial access or expansion direction is unreasonable or not technically/economically feasible having regard to legitimate business interests. Clause 32(3) provides arbitration where the Joint Venturers contest a default notice. No specific arbitral awards or judicial reviews are recited in the text.

Controversies implicit in the drafting include the tension between the Joint Venturers’ “legitimate business interests” (defined as those of an independent pipeline owner without bundled gas trading) and the State’s desire for broad third-party access at “fair and reasonable” tariffs (recital (b), clauses 20–22). The Minister’s power to determine terms after two months of failed negotiation (clause 20(9)) is constrained by mandatory regard to the Agreement, legitimate business interests, interests of existing and other determined users, and operational requirements. The carve-out in clause 21(3) protecting the Initial Committed Capacity from later uniform laws unless unutilised reflects a negotiated balance that could generate future dispute if market conditions change. Environmental and traditional-usage qualifications appear repeatedly, reflecting contemporary concerns that could ground objections under the EP Act or native-title processes, though the Agreement channels these through ministerial advice from the Minister for Mines (clause 7(3)) and consultation (clause 11).

Most practitioners miss that the Joint Venturers’ liability is several only for monetary sums; breach of any non-monetary obligation can be proven against any one of them and still binds all (clause 3). The “legitimate business interests” definition is deliberately narrow—independent transmission without gas trading—yet is a mandatory consideration in every ministerial determination (clause 20(9)(b)) and by-law recommendation (clause 21(1)(a)); any attempt to bundle services could therefore undermine the non-discrimination warranty.

The Initial Committed Capacity is grandfathered from later uniform pipeline laws except to the extent it is unutilised at any time (clause 21(3)). This creates a moving target: as foundation customers’ offtake fluctuates, previously protected capacity can become subject to by-laws or uniform legislation. Clause 20(6) expressly relieves the Joint Venturers from implementing expansion proposals where not technically or economically feasible having regard to legitimate business interests; however, the Minister may direct proposals and the only recourse is arbitration—there is no upfront veto.

Clause 9(6) prevents any State agency from using Freedom of Information Act 1992 s. 35 to obtain project information; yet the Minister may still demand contracts (clause 22(7)) and accounts (clause 23), subject to use and confidentiality restrictions that bind non-public-service recipients. The stamp-duty exemption (clause 44) sunsets two years after the Pipeline is first used; any assignment or tenure instrument executed after that date loses protection.

The automatic 21-year extension of the Pipeline Licence (clause 16(1)) displaces Petroleum Pipelines Act 1969 s. 11 (clause 16(5)(d)), but any further renewal after the second 21-year term is governed by the unmodified Act (clause 46(2)). Finally, clause 10(7) limits the Joint Venturers’ liability for breach of the implementation obligation to direct losses only; indirect, consequential, loss-of-profit and increased-cost claims are carved out—yet the State retains the termination right under clause 32.

Compliance begins with route agreement under clause 7, including referral to the Minister for Mines under Part IIA of the Petroleum Pipelines Act 1969. Quarterly reporting to the Minister (clause 6(2)) and consultation on studies are mandatory. Before submitting clause 9 proposals, the Joint Venturers must invite Third Party expressions of interest using Minister-approved tariff principles open for at least 60 days (clause 8(2)) and advise details of Initial Committed Capacity reservations (clause 8(1)).

Detailed proposals must address all 15 matters in clause 9(1) to the fullest extent reasonably practicable, including a pipeline sized to the greater of the stated diameters or Initial Committed Capacity, expandable by 50 %, operating at ≥10 200 kPa. Each proposal may be staged with ministerial approval (clause 9(2)). Evidence of financial capability and readiness must accompany the final proposal (clause 9(4)). Services and works sourced outside Australia require prior ministerial consultation (clauses 9(3), 13(4)).

Once approved (or deemed approved after arbitration), implementation must occur within two years, subject only to EP Act, traditional-usage laws and reasonable maintenance shut-downs (clause 10(7)). Local content obligations under clause 13 must be flowed down to third-party contracts, with monthly reports (or at Minister-determined intervals) including copies of third-party compliance reports.

Environmental management requires continuous monitoring, annual or as-required reporting (clause 14(1)), and immediate notification plus new proposals if new information emerges (clause 14(2)–(4)). Pipeline Licence and tenure applications must be made within three months of all proposals being approved and clause 9(4) evidence furnished (clause 16(1)); fees must be paid annually.

Access compliance entails maintaining an indicative tariff schedule (clause 22(3)), offering non-discriminatory terms consistent with approved principles or by-laws (clause 20(2)), annual reporting of access requests (clause 20(3)), and capacity expansion where feasible (clause 20(4)). If a Third Party complains of failed negotiations, the Joint Venturers must supply details to the Minister immediately (clause 20(8)) and comply with any ensuing determination unless it is unreasonable or infeasible (in which case arbitrate under clause 20(10)).

Accounting records must be segregated, identify all related-party transactions, and be produced with auditor certification on request (clause 23). Consultation with the Minister on any significant third-party dealings that could affect the State’s interest is required on a confidential basis (clause 38). Notices must be in writing and sent to the prescribed addresses (clause 39).

Periodic review meetings with the Minister to assess whether the Pipeline meets regional industry needs are obligatory (clause 20(11)). Any desire to vary activities or tariff principles triggers a fresh proposal process under clause 12. Records of all by-law recommendations and consultations with the Energy Minister must be maintained (clause 21(1)). In the event of force majeure, prompt notice and best endeavours to minimise effects are required (clause 30). Should any default notice be received, the matter must be remedied within 180 days or arbitrated within 60 days (clause 32).

Compliance is best assured by maintaining a live register of all ministerial approvals, by-laws, access contracts, capacity utilisation, environmental reports and accounting certifications, with automated triggers for the two-month negotiation clock and annual reporting deadlines. Legal sign-off on every ministerial submission is prudent given the termination consequences of material unremedied default.