By Andrew Hobbs, Group Editor
TALK is afoot about the construction of a new pipeline between Alice Springs and Moomba – which if built could send gas from the Browse basin, offshore Western Australia, to Australia’s east coast gas market.
As Lauren Barrett writes in her reports from the South East Asia Australia Offshore and Onshore Conference (SEAAOC) this month, the concept is already the subject of a $2 million feasibility study by gas transmission company APA Group.
That feasibility study is due to be completed in the 2015-2016 financial year – right in the middle of the domestic gas shortage which is predicted to hit New South Wales if the state does not find another supply.
Any combination of state and federal government is bound to run into controversy – moreso when developing a major infrastructure project.
The largest potential stumbling block to the project is one of cost efficiency – whether it would be possible to get the gas into the Sydney market more cheaply than if it were bought from an existing supplier.
According to the Australian Petroleum Production and Exploration Association (APPEA), regulatory restrictions mean the state currently imports 95 per cent of its supply from other states.
APPEA is in the middle of a public information campaign to encourage support of the NSW natural gas industry – saying in its media release that gas bills in the state had risen following an 18 per cent increase in regulated gas prices from 1 July by the state’s Independent Pricing and Regulatory Tribunal.
“There are several factors that cause gas prices to rise and fall. But it is clear that developing new supplies is critical to putting downward pressure on gas prices,” the
APPEA’s chief operating officer for the Eastern Region, Paul Fennelly, wrote in a blog that rising gas prices reflected cost of supply, but was also in response to the export-driven economic incentives
“The size of the eastern Australian gas market is tripling in a little over two years – driven by export opportunities, not domestic demand, which is essentially flat,” he said.
“Development on this scale has provided the incentive for further investments in traditional (declining) domestic supply sources, such as the Cooper basin.”
It goes without saying that the export opportunities from the Browse basin and other fields in Australia’s north are equally, if not more, significant – particularly when domestic gas prices in Australia remain comparatively low.
Barring domestic gas reservation – a proposal which governments like and APPEA fiercely opposes – it is difficult to see what might compel a company to sell its gas into this network.
The announcements come as Victoria prepares for a state election – due to occur in November if warring members of its parliament don’t decide to push it sooner.
Resources policy, as ever, remains something of a non-issue while the state’s moratorium on new exploration licences for onshore activity remains in place – with the activity of local activist groups such as Lock the Gate being significantly more muted there.
The period of this moratorium has been used for widespread community consultation – which the Coalition government says surpasses Labor’s previous record, and which Labor says is meaningless window-dressing while a moratorium remains in place.
That moratorium is due to end in July 2015 – with neither party vocalising a plan to extend it further.
It may be a long way off, but Victoria’s onshore oil and gas companies might be well advised to have their houses in order for the end of the financial year.
This month sees the inaugural incorporation of Energy Publications’ Asia Pacific Subsea World magazine inside Oil & Gas Australia.
Since its inauguration in 2010, the magazine has led the region’s coverage of the subsea sector and the companies that service it – both in the region and around the world.
We hope this new location will be useful for the magazine’s dedicated readers – and encourage all newcomers to check it out.