Australian Competition and Consumer Commission (ACCC) Chairman Rod Sims has said in order for the Northern Territory to play a role in the east coast gas market, there needs to be more onshore development and industry must avoid pipeline charges.
Mr Sims comments came from his speech at the South East Asia Australia Offshore and Onshore Conference in Darwin.
“For the Northern Territory to realise its potential in the east coast gas market it is imperative we have some onshore gas development,” Mr Sims said.
“We also need to avoid pipeline charges making the cost of transporting the gas to the east coast prohibitive.”
Mr Sims said it’s difficult to envisage where new gas supply will come from in the short to medium term to alleviate the high prices looming for gas users in the south.
“It seems to me that the Northern Territory could play a significant role in meeting demand in the east coast. As we know, there is significant gas in the NT that doesn’t requiring fraccing.”
Mr Sims gave the example of Central Petroleum’s statement regarding 300 PJs of available gas that it says does not require additional fraccing.
“While we do not purport to weigh in on the debate surrounding the environmental issues, we consider that policymakers need to consider the costs or benefits of projects on a case-by-case basis,” Mr Sims said.
“This is particularly pertinent to the Northern Territory given the prospective gas projects are likely to be spread across the vast landscape and potentially represent different levels of risk.”
Mr Sims said the ACCC’s inquiry found pricing at a large number of pipelines on the east coast was well above competitive levels, including on a number of pipelines that gas from the Northern Territory would have to traverse to be supplied into Queensland or south-eastern Australia.
“The ACCC welcomes the COAG Energy Council’s current consultation on the changes that would need to be made to the coverage criteria under the National Gas Law to pose more of a constraint on this behaviour,” Mr Sims said.
“Central Petroleum has highlighted that a lack of regulation of mature pipelines will hold back new gas supplies.”
“We also welcome the COAG Energy Council consulting further on enhanced pipeline financial information reporting by pipelines so that users, including potential users in the Northern Territory , can more effectively negotiate with pipeline operators,” Mr Sims said.