Sir,

A couple of comments on your article re Rex's Pipedream.

The problem of no markets en route from the North West Shelf to the major markets in south-east Australia is still the case.

With gas prices in Australia in the $A2 to $A3 range, no one will be willing to put their money into a cross continent pipeline. With gas prices in Henry Hub at $US11 at the moment and predicted to stay above at least $US5, no one would be willing to put their gas into a cross continental pipeline while they can get far higher prices exporting the gas as LNG.

I would suggest the solution would be to build an LNG terminal somewhere on the eastern seaboard where it has access to the pipeline network and thus the eastern market. An LNG terminal would cost say $US 500 max, a fraction of the cost of a Rex-style pipeline.

And an LNG terminal on the eastern seaboard could take LNG from a PNG project and save the cost of that pipeline. Going the LNG route would give Oil Search et al different markets for their gas, not just (a low value) Australian market.

Michael Williams

MFW Consultants

Sir,

Slugcatcher enjoys stirring the pot, but with Queensland coalbed methane growing rapidly, the PNG-to-Brisbane pipeline at FEED stage, and NSW coalbed methane exploration looking very promising, even he can't be serious about a trans-continental gas pipeline.

But no doubt Slugcatcher is correct in saying that someone will soon dust off this silly idea yet again.

DK

West Perth