Ian Macfarlane Has A Very Simple Solution To Australia's Gas Problems

Federal minister for Industry Ian Macfarlane.

Build a pipe, Ian Macfarlane says.

The solution to imminent gas shortages slated for New South Wales in 2016 is that simple, the industry minister says.

Macfarlane told Fairfax he is committed to establishing a national gas network which could theoretically pipe the commodity from coast to coast.

And all that needs to happen for this to become a reality is the construction of a 1000km pipeline between Alice Springs in the Northern Territory and Moomba in South Australia.

But for it to be filled with gas, users will need to pay a market-based price so producers don’t just export Australian gas overseas. Meaning NSW will probably be paying international prices for Australian gas if they want reliable supplies from 2016 onwards.

Image: Australian Energy Regulator.

The pipe would link the Top End to the East Coast and according to industry estimates, would cost about $1.3 billion to whack together and would involve three states as well as the Commonwealth – not as simple at second glance.

Macfarlane told Fairfax the idea is “more than a vision” and said discussions with NT chief minister Adam Giles and NSW energy minister Anthony Roberts have already begun.

LNG being produced off Far North Queensland and the WA coast is earmarked for export and there’s already a 900km pipe being built between WA’s Browse Basin and Darwin.

NSW only produces about 5% of its own gas – importing the remainder from South Australia, Victoria and Queensland and with new projects still some time off, the state needs to start looking at ways to plug the gap and ward off impending gas price hikes, Macfarlane said.

“The only solution to the gas supply problem in NSW appears to be interconnection,” Macfarlane said.

He estimates the pipeline could deliver NSW the gas it requires two years faster than developing its own projects. However, the Commonwealth is not considering funding the pipeline project at this time.

There’s more here.

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