ABARE report ''potentially misleading'' on Australian gas fields capacity: pipeliners

A recent key report by ABARE has painted an overly optimistic and potentially misleading picture of the productive capacity of existing Australian gas fields," according to the nation's peak pipeline industry body.
ABARE report ''potentially misleading'' on Australian gas fields capacity: pipeliners ABARE report ''potentially misleading'' on Australian gas fields capacity: pipeliners ABARE report ''potentially misleading'' on Australian gas fields capacity: pipeliners ABARE report ''potentially misleading'' on Australian gas fields capacity: pipeliners ABARE report ''potentially misleading'' on Australian gas fields capacity: pipeliners

Dr Allen Beasley, Executive Director of the Australian Pipeline Industry Association (APIA), was commenting on the recent release by ABARE of its report "Australian Gas Supply and Demand Balance 2019-20"

Addressing a Perth APIA lunch function yesterday, Dr Beasley said the ABARE report was "based on implausible modelling assumptions".

"APIA is concerned that the ABARE report may have the unintended consequence of lulling policy makers to believe that major eastern coast gas markets will be well supplied until 2020 at the earliest," Dr Beasley said.

"This false sense of security may in turn defer any need to consider economic delivery of gas via major new transmission pipeline developments from northern Australia and PNG.

"This would place customers in eastern Australian markets in a far worse position in the longer term because of the risk of supply shortfalls and substantial price shocks."

Dr Beasley said that because the ABARE Report raised important and controversial issues about the sustainability of Australia's long term supply of natural gas to eastern markets, APIA had commissioned an independent evaluation of the Report.

He said the results of that independent evaluation highlighted a number of deficiencies relating to the conduct of the Report - including the key conclusion reported by ABARE that "… New South Wales, South Australia, Tasmania and Victoria will continue to be self-sufficient, with gas demand expected to be met from existing sources up until 2019-20."

"The overall analysis shows the ABARE finding to be flawed, leading to conclusions that are not sustainable."

Dr Beasley said the next few years would represent a critical opportunity for Australia to implement market-based solutions bringing large, new gas supplies to markets in eastern and southern Australia.

"Otherwise, there will be substantial increases in the gas price charged by existing producers in eastern and southern Australia, leading to slower economic growth, a slowdown in investment and reduced market penetration by natural gas," he said.

"The price of gas being offered by existing producers to their customers is already rising, reflecting a situation where growth of supplies of gas in eastern markets is already constrained.

"Customers therefore have strong incentives to secure supplies from alternative, more cost-effective and competitive supply sources."

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