Gas Pipeline from WA to the East Coast

source: The West Australian

Deputy Prime Minister Barnaby Joyce has thrown his support behind a new pipeline linking WA’s gas fields to the strained markets of the east coast, saying the State has the potential to “make a buck” while helping Australia’s energy market.

As debate rages in the Eastern States about gas export restrictions to be imposed on energy companies to meet domestic shortfalls, the Government has assured WA producers they will be exempt from the crackdown given adequate domestic supplies.

Speaking in Perth yesterday, Mr Joyce said a new pipeline could be backed by the Government’s Northern Australia Infrastructure Facility to deliver West Australian gas to the rest of the country.

“Ultimately we have to have a more vibrant gas market and I’d love to work with private enterprise to see what we can do through such things as the NAIF because you’ve got your big gas resources on the North West Shelf, big gas requirements in the south,” he said,

He raised the potential for North West Shelf LNG to be shipped to Melbourne where it could feed the market through an import terminal.

Energy company AGL has already announced Crib Point in Victoria as its preferred site for a new $250 million gas import jetty to increase energy security and supply for customers in south-eastern Australia.

“I absolutely think these are things that are worthwhile to look at, and you would make a buck. It would do very well for itself,” Mr Joyce said.

“The advantage the American market has is that it has lots of gas pipelines. What we have is a gas pipeline owned by different companies in stages which gives them a monopolistic power and gives them the capacity to exacerbate the problems in the gas market.”

Malcolm Roberts, chief executive of oil and gas body APPEA, said a new import terminal in the Eastern States would be viable only if there was the demand to underpin the investment, but if it was built WA would be in a position to compete for contracts.

“There is the capacity for WA cargoes … but WA would be competing with every other exporter in the region as well,” he said.

Market analyst EnergyQuest’s Graeme Bethune said selling to the east coast market may not offer the best return for WA producers, and it may be better to continue selling LNG offshore, with imports coming from places like Papua New Guinea instead.