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Australia's economic saviour officially gas

15 Sep 2020 2:22 PM | Sonia Harvey (Administrator)

AUSTRALIA’s prime minister Scott Morrison, alongside the minister for energy Angus Taylor, and minister for resources Keith Pitt, today confirmed a gas-fired recovery to drive Australia’s economic growth, post-pandemic. 

Today's release from the PM officially locks in the economic strategy the federal government will take to fend off a serious growing recession, and gas is at the heart of it, hoping to spur a manufacturing boom with low-priced feedstock.  

"We'll work with industry to deliver a gas hub for Australia that will ensure households and businesses enjoy the benefits of our abundant local gas while we hold our position as one of the top global LNG exporters," Prime Minister Scott Morrison said.

"This is about making Australia's gas work for all Australians. Gas is a critical enabler of Australia's economy.." 

Much of the plan is based on the recommendations of the National COVID Coordination Commission, headed by former mining executive Nev Power, but has not included a $4 per gigajoule price target, which received pushback from industry when a draft of the report was leaked earlier this year.  

However it is committed to cheaper supply, and transparency with hopes to turn Queensland's Wallumbilla into a Henry Hub-like development in the US with clear pricing signals to market, to be called the Australian Gas Hub. It is also developing a National Gas Infrastructure Plan.  

This will be done in part via a voluntary and industry-led code of conduct around pipeline use for producers and buyers to be developed  by February next year.  

It also wishes to "ensure Australians are paying the right price for their gas by working with the Australian Consumer and Competition Commission to review the calculation of the LNG netback price which provides a guide on the export parity prices and to use the  NGIP to develop customer hubs or a book-build program that will give gas customers a more transparent and competitive process for meeting their needs."  

It plans to essentially underwrite new pipeline development if industry does not step up to it, and ensure more gas supply into market to support lower prices and general price transparency via developing five key gas basins, beginning with frontier areas in the Beetaloo Sub-basin, North Bowen Basin and the Galilee.  

The government will spend A$10.9 million to identify priority pipelines and critical infrastructure under its new NGIP and says this new plan will "highlight where the government will step in if the private sector doesn't invest".  

"The government wants the private sector to step-up and make timely investments in the gas market. If the private sector fails to act, the government will step in - as it has done for electricity transmission - to back these nation building projects. This may include through streamlining approvals, underwriting projects or the establishment of a special purpose vehicle with a capped government contribution," it said this morning. 

Source: Energy News Bulletin

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