Northern gas supply essential for Australia, gas bodies tell Sunrise meeting

Gas from offshore northern Australia will be essential in meeting medium term domestic gas demand price-competitively, the Australian Gas Association (AGA) and Australian Pipeline Industry Association (APIA) said today.

Their comments were made at a meeting of industry groups held in Canberra, and organised by the Northern Territory Government as part of its campaign to have gas from the Timor Sea's Sunrise gas field brought onshore for LNG processing and also for provision to Australia's domestic gas markets, rather than be exported directly from a floating offshore facility to North America.

"Australia must be able to access new, competitively-priced gas over the next 4 to 5 years, when the existing major gas supply contracts come up for re-negotiation, if we are to avoid rising well-head gas prices" said the Chief Executive of the AGA, Bill Nagle, and the Executive Director of APIA, Allen Beasley.

"That is why northern gas supplies - from the Timor Sea and/or Papua New Guinea - will be needed alongside additional south-east Australian gas reserves, to avoid any steep increase in well-head gas prices when meeting strong medium term demand. Maintaining the cost-competitiveness of well-head gas prices in the medium to long term is the only way to ensure effective energy market reform.

"The medium term gas supply/demand outlook is an important issue for the Australian domestic gas market and for Australian industry, and it is an issue which is at risk of being overlooked by the Council of Australian Governments' (CoAG) energy market review process, currently underway. This issue, and the role of northern offshore gas supplies in helping to meet Australia's medium term domestic gas demand price-competitively, must be given urgent consideration by CoAG.

"There are strong economic and national interest arguments for bringing gas onshore from the Timor Sea and/or Papua New Guinea. These include substantial employment and investment multipliers for the domestic economy, increased exports and value-adding opportunities, and further regional development opportunities."

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