East-west gas pipeline no pipe dream despite report: Barnett
An advocate for a cross-country gas pipeline says he still believes the project has a future, despite a study finding otherwise.
The biggest advocate for a multi-billion-dollar gas pipeline across Australia says he still believes the ambitious project has a future, despite a federal government-funded study finding it doesn’t stack up.
Former West Australian premier Colin Barnett, who publicly pushed for the development of a pipeline from WA as a solution to the east coast gas supply crisis, said he had not changed his view that the pipeline could be a “silver bullet” for the nation’s energy issues.
The Department of Energy last month quietly released the findings of the study by ACIL Allen into a pipeline that would connect the massive gas fields of northwest Western Australia to the east coast.
The study found that while the $5.8 billion pipeline was technically feasible, “commercial and market risks present major challenges for the project”.
But Mr Barnett disputed the study’s findings, arguing that the right government support could make the pipeline a reality.
“It is an absolutely doable project,” he told The Australian.
“Gas wouldn’t become the major source of energy on the east coast but it would stabilise the system. It gives flexibility and it would solve the crisis. It is a silver bullet.”
The ACIL Allen study estimated it would take about five years to plan and build the pipeline and about a decade for use of the pipeline to grow.
The study also found that the pipeline would need long-term commitments from both buyers and sellers to make it financeable, something that would be difficult to achieve amid the current market uncertainty.
“Market modelling indicates that strong uptake of gas delivered via the pipeline would be unlikely to occur for around 10 years, and that this could be further delayed if significant new sources of supply emerged nearer to market,” the report said.
“On this basis, the west-east pipeline does not appear to be the best or most economical option for dealing with the supply issues facing the gas market in eastern Australia.”
But Mr Barnett noted that WA had previously planned and built large-scale pipelines across the state in just a few years, and argued that the cross-country pipeline could be built in a similar time frame.
The study’s findings were supported by oil and gas producer Woodside Petroleum.
Woodside chief financial officer Sherry Duhe said existing east coast gas resources and proposed LNG import facilities both represented better alternatives.
“We’ve been very clear for a long time now that it just doesn’t make sense to build how many thousands of kilometres of pipeline when there’s gas on the east coast that can be used to solve this problem, or some sort of virtual supply situation that would solve it far more economically,” Ms Duhe said.
“I’m pleased that someone had a logical analysis.”
WA Mines and Petroleum Minister Bill Johnston said the government had long known the pipeline project wasn’t viable, and urged companies concerned about energy availability on the east coast to move west.
“If industrial users from the east coast want to move to the west, we have enough gas to support their projects,” he said.
“There are no shortages of gas in WA, only opportunities and a stable government.”