Australian government resurrects west-east gas pipeline concept

The long-considered concept of a natural gas pipeline linking fields in Western Australian to markets along the country’s east coast has been resurrected by the federal government as a possible way to solve the looming domestic gas supply shortages in the east.

New support for the scheme has been voiced by Energy Minister Josh Frydenberg and Finance Minister Mathias Cormann. Support has also come from former Western Australian Premier Colin Barnett who believes that gas discoveries off the northwest coast in the last 20 years could provide 100 years of gas for Australia.

Barnett considered the trans-Australian pipeline as an option for supplying the east coast when he was Western Australia’s Resources Minister in the 1990s.

But the original concept came from former Federal Energy Minister R.F.X. Connor during the mid-1970s when the Whitlam Labor government was in power. Connor, a staunch nationalist, was opposed to exporting North West Shelf gas as LNG, preferring to keep it for Australia’s domestic market.

Current Energy Minister Frydenberg acknowledged that the idea has been around for decades, but added that the option was appealing as a way of alleviating the tight gas market in the eastern states. He said it would be nation-building infrastructure and the idea is one that the Australian government is seriously pondering.

Estimated to cost in excess of $5 billion (Aus.), the line could be laid from northwest Western Australia for 1,500 km across the inland to link with the Moomba facilities in northeast South Australia and then use existing pipelines to the east coast.

Enthusiasm for the plan, however, is not universal. Other commentators say that any gas delivered from west to east will be expensive. There could also be major problems in finding sufficient gas in Western Australia as much of the developed offshore gas is already earmarked for international markets. Suppliers are only likely to make gas available beyond their domestic market obligations to the home state if the price is commercially viable.

Frydenberg concedes that the economics would need to step up, but says the government is investigating.

The trans-Australian line idea has coincided with this week’s announcement that the Northern Territory government is putting $250,000 towards a feasibility study to expand the Darwin LNG project to a two-train facility supplied by undeveloped gas fields in the Timor Sea (OGJ Online, Apr. 20, 2017).

The Northern Territory also is host to unconventional onshore gas resources that analysts suggest are large enough to supply both LNG markets and markets along the east coast, the latter via a pipeline link soon to be built to Queensland. However, this supply is on hold due to the moratorium placed on hydraulic fracturing that has cut onshore exploration and development programs.