26 March 2015
Pipeline grid comes to the fore on gas, APA Group says
Australia's interconnected gas pipeline grid will allow increased volumes of gas to flow into New South Wales and the east coast, even if NSW's own coal seam gas resources are slow to develop, gas pipeline owner APA Group says.
APA's group executive transmission, Rob Wheals, is expected to outline opportunities for increased volumes of gas to flow northwards from the Bass Strait and for gas to flow south-east from the Northern Territory at the Australian Domestic Gas Outlook 2015 conference in Sydney on Thursday.
The $10 billion company is among the lead contenders to build a potential $1.3 billion pipeline to link the Northern Territory with the rest of the national gas grid. APA is widening its services to offer customers easier transportation for gas across its various pipielines in the south-east.
Mr Wheals will tell conference goers that APA wants to invest in new pipeline infrastructure to move more gas, driven by new capacity from the start-up of the three Queensland LNG export projects this year. It is also publishing more information on pipeline capacity and utilisation to provide greater market transparency demanded by gas buyers.
The Queensland LNG projects, the first of which began output in January, are expected to more than triple gas demand on the east coast within two years. The surge in consumption has raised concerns about a shortage of gas for domestic consumers, particularly given a stalling in coal seam gas development in NSW and a moratorium on onshore gas in Victoria.
Cheryl Cartwright, chief executive of the Australian Pipelines & Gas Association, is calling for more information in the market to help address the supply issues on the east coast.
"It's all very well arguing with government about numerous delays and discouragement for CSG development," Ms Cartwright said. "That's Plan A. If CSG doesn't happen, what's Plan B? Where will the gas come from and who will provide it? The market needs information about what is available and what's possible."
Ms Cartwright said pipelines would be built to meet any delivery need but that the gas market needed to know there was sufficient gas before more investment was made.
Mr Wheals notes the Queensland LNG projects may still look to use more gas from third parties where possible to improve efficiency, which would cloud the east coast supply picture with uncertainty.
He notes that Bass Strait still has significant gas reserves that can flow into the east coast market, while the Northern Territory estimates it has more than 200 trillion cubic feet of unconventional gas resources across six basins, some onshore and some offshore.
APA is participating in a competitive NT government bid process to build the proposed pipeline to link the NT with the grid. It is among nine short-listed companies that submitted initial proposals to Darwin earlier this month. An expert panel is expected to announce a more selective short list over the next few months, with final proposals due from those bidders in September.
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