“To me it is unfathomable that governments and businesses would want to invest big money in the PNG pipeline when eastern Australia has an indigenous gas reserve that is similar in size to the North West Shelf,” he told EnergyReview.net.
“There is so much gas – particularly coal seam gas – in Queensland that imported gas coming through a 3000km pipeline will be unable to compete on price.”
To date between 5 and 7 trillion cubic feet (TCF) of coal seam gas has been proved up in Queensland and more is being proved up all the time, according to Lydyard.
“Origin Energy has estimated that there could be as much as 25 TCF of recoverable gas in place,” he said.
Even allowing for growing energy demands, there was enough CSM and conventional gas in Queensland, NSW, Victoria and South Australia to supply eastern Australia for a couple of generations, Lydyard said.
“There would also be plenty of gas left over to develop energy-intensive industries in Queensland and other parts of eastern Australia,” he said.
“Queensland gas prices are very competitive on a worldwide scale. The state has vast amounts of cheap energy and would have to be very competitive for any energy-intensive industry.
“Rather than building a billion-dollar pipeline across Torres Strait, we should be looking at putting in one piece of pipe that would create a genuine eastern states gas grid. A pipeline running from Wallumbilla in south-west Queensland to Newcastle would complete this gas grid and would only be 724km long.”
Such pipeline would also run through many NSW permits that are prospective for CSM and conventional gas, encouraging further development of the nation’s gas resources, according to Lydyard.
“Greater availability of inexpensive gas could make a big difference to industry and employment in Newcastle and the Hunter Valley,” he said.
Lydyard said that government and the market were failing to understand the growth and importance of CSM in Queensland.
“Queensland CSM companies are not getting the credit they deserve,” he said.
“CH4 has converted an exploration project [Moranbah] into production in a very short period. CH4 and BHP have huge reserves in the Bowen Basin that can supply the gas needs of northern and central Queensland. This is the area where the PNG pipeline will come ashore and is its first potential market, and the Moranbah Gas Project would be a very strong barrier to that market.”
In addition to CH4's permits, large CSM fields were being proved up in western and southern Queensland, Lydyard said.
"Fairview [operated by Tipperary] and Spring Gully [operated by Origin] have signifcant proved reserves, and the Walloon coal measures in the Surat Basin are delivering constantly growing commercial quantities of gas to QGC [Queensland Gas Company], Arrow Energy and Comet Ridge."
But the CSM industry had done a poor job of convincing federal and state governments of the importance of the resource, according to Lydyard.
“The industry and its representative bodies, such as the Australian Coal Seam Gas Council, have a lot of work to do in getting the message out.”