Though the NWS project supplied about 5150 petajoules of gas to WA's domestic market between 1984 and 2013, the NWS's existing domestic gas contracts will taper off by 2020 - which the state's Independent Market Operator has identified as a "key uncertainty" for the state's energy sector when the domestic gas market would be tightening.
Unlike most other states, WA's gas network is isolated from the rest of Australia, and plans for a trans-Australia pipeline remain stalled.
The gas for the new deal will come in part from new developments at Persephone and Greater Western Flank Phase Two, which will underpin the future operation of the project's processing plant.
The state government said these new developments would also enable the JV to export a further 86 million tonnes of LNG.
The new commitment is equivalent to about 100 terajoules per day of additional gas for the domestic market - about 10% of the current supply. Production from the new gas developments is expected to start in 2017.
The agreement will be formalised through an amendment to the North West Gas Development (Woodside) Agreement Act 1979, which was introduced into state parliament yesterday.
While the upstream industry continues to attack the domestic reservation policy and users' and unions' efforts to introduce something similar on Australia's east coast which is facing a near-term gas crunch with three LNG projects coming online, WA Premier Colin Barnett was resolute yesterday on the issue.
"The state government is committed to ensuring that the WA community has a stable supply of gas, particularly at a time when the state is poised to become one of the world's largest producers of LNG," Barnett said.
"This agreement will help to bring more confidence and certainty for the Western Australian energy sector and energy-intensive industries such as manufacturing around the future supply of gas.
"This outcome is consistent with the state's domestic gas [reservation] policy, and we will continue to work with other producers to ensure ongoing supplies of domestic gas for WA into the future."
The DomGas Alliance of downstream users said the new agreement would not fully resolve concerns around future gas supplies for WA as "it was clear that the joint venture partners of the North West Shelf project wanted to exit the domestic gas supply market after 2020".
"This would have disastrous consequences for industry, jobs and economic growth in our state," DomGas Alliance executive director Matt Brown said.
"We do, however, need to work through the detail of the proposed legislative changes, particularly on issues around the responsibility of the NWS to ‘market' their gas to domestic users and also on the minister's ability to vary the 15% domestic requirement.
"These issues potentially undermine the objective of delivering gas into the local market."
He said a major concern for the state was that, despite the new agreement, the amount of gas WA receives from the NWS project would significantly reduce post-2020, considering the NWS supplies over 50% of WA's gas needs.
Brown said the fact that the NWS will deliver 10% of WA's domestic needs via the new agreement signalled a "major tightening" of the domestic gas market post-2020, which he called "an enormous economic challenge for the state due to our heavy reliance on gas for our energy needs".
"The state government has worked hard to secure this agreement," Brown said. "We now need our federal government to step up and require all LNG producers to meet their moral obligation to ensure Australian industry and jobs benefit from new gas projects.
"Supplying the domestic market must be a part of their ‘social license to operate'."
He said that with major projects like Gorgon, Wheatstone and Pluto may not have supplied any gas to WA with no reservation policy.
Woodside owns a 16.7% stake in the NWS, Australia's first and largest single resources project, and operates it on behalf of its partners BHP Billiton, BP, Chevron Corporation, Royal Dutch Shell and Japan Australia LNG, which all hold 16.7% interests.
