A CASE FOR A NATIONAL PIPELINE GRID FOR NATURAL GAS

Abstract

The development of an integrated natural gas pipeline system should be a goal within a national energy policy for Australia. Australia has in excess of 100 years supply of natural gas in the proved and probable category and another 250 years of supply that we can expect to find with reasonable confidence.

There are clear indications that if markets can be created or developed, gas producers will respond by establishing reserves to service those markets. A recent example is the rapid increase in proved/probable reserves established in the Amadeus Basin following the Northern Territory Government's interest in constructing a pipeline to Darwin.

The Australian Gas Association has taken the view that reserves will be a limiting factor in natural gas development and hence pipeline systems will only be developed to access more remote and expensive fields as the current reserves are depleted. This paper takes the contrary view that natural gas reserves eventuate from market driven policy. That is, if an attractive market is opened to natural gas then reserves will be forthcoming.

A number of policy guidelines which would allow the economic development of a national natural gas grid are the key incentives for the explorers.

Utilisation of natural gas for the generation of electricity in New South Wales to the extent of 10 per cent of the annual load would enhance the performance of the total electrical system. By providing this substantial natural gas market an economic basis can be provided for the proposed national grid links.

For the electrical generation market in New South Wales gas producers should be guaranteed a well head price of say $1.50 to $2.00 a gigajoule for onshore gas.