The New South Wales state government has signed a memorandum of understanding with the Northern Territory to work together on developing a pipeline which connects the states’ gas markets.
Under the MOU the governments will cooperate to drive development of the pipe which could solve some of the gas shortage issues NSW will face in coming years when LNG gas exports ramp up and existing supply agreements expire.
NSW Premier Mike Baird said the government is working to connect the NT to the eastern seaboard to combat impending supply and price issues.
“We are actively exploring all possibilities to increase gas supply to our domestic consumers and this MOU is an important step in offering NSW Government support to the process now underway,” he said.
“By establishing a national grid we can help secure our energy needs and put downward pressure on household bills.
“Without affordable and reliable gas supplies our manufacturers will struggle to compete and households will pay higher prices.”
NT chief minister Adam Giles today said the infrastructure would also boost the Top End’s economy.
“A gas pipeline between Central Australia and the East Coast is both a win for the Territory economy and a win for states such as NSW that urgently need to secure an affordable new energy supply,” he said.
“Momentum for this nation-building project has been growing since the recent COAG meeting where leaders voiced unanimous support for the pipeline. It is fantastic to now also have a specific MOU with NSW agreeing to work together on this project.
“The Territory Government understands that time is of the essence and we are doing everything we can to get this project off the ground as quickly as possible.”
Last week more than 100 people from the gas industry and related sectors attended a briefing in Alice Springs to hear more details about the project.
No doubt industry minister Ian Macfarlane would be happy about today’s development. He’s been outspoken in the past about how “cranky” he was with the states for not addressing the gas supply issue.
Earlier this year Macfarlane told Business Insider it’s imperative NSW gets a move on developing its own supply because of increasing demand for gas on the east coast and with the state’s reliance on imported gas, mainly from South Australia and Queensland.
“The window in which NSW can do this is closing quickly. Ultimately it’s up to NSW to manage its gas resources, but the longer it waits to advance its local gas industry, the more reliant it will be on higher priced gas from other states for a longer period of time,” he said.
“NSW can’t expect other states to subsidise its industry by selling gas to NSW at a discounted rate, thereby short-changing the people of their own states.”
Expressions of interest from the private sector to build and operate the pipeline open on November 13.
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