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Australia unveils national gas strategy

POLICY THE Australian government has announced a
slew of natural gas-focused measures aimed at
helping the economy to recover from the coro-
navirus (COVID-19) recession.
Prime Minister Scott Morrison this week
that the government intended to “reset” the East
Coast gas market by encouraging both upstream
and mid-stream development.
“The government [will] reset the East Coast Canberra is concerned that the planned clo-
gas market and create a more competitive and sure of the coal-fired Liddell TPP in the Hunter
transparent Australian Gas Hub by unlocking Valley in 2023 will leave the grid short of dis-
gas supply, delivering an efficient pipeline and patchable power. To that end, Morrison said
transportation market, and empowering gas the government had tasked state-owned Snowy
customers,” he said in a September 15 statement. Hydro to draw up contingency plans for a TPP
Canberra wants to work with state and terri- at Kurri Kurri.
tory governments to set new gas supply targets “We won’t risk the affordability and reliability
and enforce potential “use-it or lose-it” require- of the NSW energy system and will step in unless
ments on gas licences. the industry steps up,” Morrison said.
Morrison committed AUD28.3mn Australian Energy Minister Angus Taylor
($20.66mn) of Commonwealth funding to said the market needed to focus on new, dis-
find ways to unlock five key gas basins, starting patchable power. He said: “Over the last decade,
with the Northern Territory’s Beetaloo Basin as the private sector has not built a single new reli-
well as Queensland’s North Bowen and Galilee able power plant in NSW. The government has
basins. The Beetaloo Basin is estimated to hold always been clear – we need to see life extension
500 trillion cubic feet (14.16bn cubic metres) of or like-for-like replacement of Liddell. If indus-
shale gas potential. try steps up, we’ll step back.”
He added that his government would also be
exploring options for a prospective gas reserve Competition and transparency
scheme while seeking new agreements with Competition and transparency were the watch-
Queensland’s three coal-bed methane (CBM) words of the prime minister’s announcement,
to liquefied natural gas (LNG) projects to with domestic gas prices a recurring worry.
“strengthen price commitments”. The government has staked its claim to a gas-
In the midstream, the prime minister based economic recovery, but without cheaper
unveiled a new AUD10.9mn ($7.96mn) National domestic supplies of the fuel that outcome seems
Gas Infrastructure Plan (NGIP) that will iden- unrealistic.
tify priority pipelines and critical infrastructure. Morrison said his government would work
While the government wants the NGIP to help with The Australian Competition and Con-
develop more transparent and competitive cus- sumer Commission (ACCC) to review the
tomer hubs, it will also serve to highlight projects calculation of the LNG netback price. The
that will receive government funding if the pri- ACCC had complained in August that the dif-
vate sector fails to invest. ference between netback prices and those paid
by domestic consumers had grown too wide. It
Stepping up noted that domestic users were paying AUD8-11
The prime minister said his government was ($5.84-8.03) per GJ between late 2019 and early
hoping that private investors would shoulder 2020, far above netback prices that had fallen
new gas projects, but that it would to back these below AUD5.50 ($4.01) in May.
“nation-building” projects if the private sector Canberra wants to reform pipeline regula-
did not. tion while also establishing a “dynamic second-
“This may include through streamlining ary pipeline capacity market”, all in the name
approvals, underwriting projects or the establish- of greater competition. The creation of an Aus-
ment of a special purpose vehicle with a capped tralian Gas Hub at Wallumbilla in Queensland
government contribution,” Morrison said. is also on the agenda, as it will deliver an “open,
It is a similar approach to the one Morri- transparent and liquid” gas trading system.
son unveiled in the power sector, where he has “To help fire our economic recovery, the next
pledged build a gas-fired thermal power plant plank in our JobMaker plan is to deliver more
(TPP) in New South Wales if private investors Australian gas where it is needed at an inter-
bow out. nationally competitive price,” Morrison said.
The federal government has given the private “We’ll work with industry to deliver a gas hub for
sector until April 2021 to reach a final invest- Australia that will ensure households and busi-
ment decision (FID) on 1,000 MW of new dis- nesses enjoy the benefits of our abundant local
patchable energy to come online in the summer gas while we hold our position as one of the top
of 2023-2024. global LNG exporters.”™

Week 37 17•September•2020 www. NEWSBASE .com P11