NSW gas pipeline project could connect north and west Australia to bring down domestic prices
Imagine a gas pipeline that is over 1000km long with a specialised construction workforce working in various locations across Australia?
That’s the dream of Federal industry minister Ian MacFarlane as he announced plans to build a new and improved national gas network to help reduce gas prices for everyday Australian families, whilst creating a new wave of Australian jobs in gas.
It’s no secret that the CSG-LNG industry in Australia has been gathering speed and is rapidly becoming recognised as a massive earnings channel for the Australian government.
With thousands of land-based gas wells being drilled in NSW and the Queensland Surat Basin, the offshore facilities of Western Australia and further development of gas resources in most Australian states, gas is once again hitting the news. As mining starts to level off, the opportunities to create additional Australian jobs in gas are high on the agenda.
Unfortunately, for Australian consumers, one of the drawbacks of these massive gas developments is that most of the LNG produced in Australia from the Ichthy’s and Browse gas fields as well as the land based facilities on Curtis Island, Queensland – is heading overseas.
Korean, Japan, and other Asian countries have no natural gas resources, therefore they have to be totally reliant on LNG imports from countries like Australia. Contracts have already been signed which will see gas leaving Australian shores on huge, purpose-built ships.
For Australian consumers this means a shortage of gas for domestic use, which in turn drives up the local price. The flow-on effect is that everyday Australians are being penalised because of the gas exports draining the local supplies.
With this fresh in the mind of consumers and governments alike, a new plan is being talked about as the tonic to prevent gas shortages in NSW and possibly other states.
Mr MacFarlane indicated this new plan to curb gas shortages in the state would include building a 1000km pipeline from Alice Springs to Moomba in South Australia.
The cost of the new pipeline is expected to come in at around $1.3 billion and if it comes off, would connect the Northern Territory to the east coast gas market.
Construction of the pipeline from Darwin to the Browse Basin would help expand the national gas network and would for the first time in Australian history allow Western Australian gas to be sold to east coast consumers.
More than just a ‘pipe dream’, this project has the potential to become a reality with Mr MacFarlane already in discussions with Northern Territory chief minister Adam Giles. If the project goes ahead, the new pipeline could supply gas to NSW within three years, which is two years earlier than if NSW developed its own gas projects.
One of the driving forces behind the pipeline is an impending and very real gas shortage in NSW which could increase domestic gas prices significantly in the Australian winter of 2016.
When you consider NSW only produces about 56 percent of its own gas, this new pipeline could solve many issues for the minister. At the moment the NSW government is relying on various Santos gas drilling projects in the state to provide additional localised gas supplies.
Ending the discussion, Mr MacFarlane also made light of the fact that no Commonwealth funding has been proposed for the gas project, although more details would be made available to the public once decisions were made about how the pipeline would be built.