Connection between eastern gas markets and gas suppliers

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Constrained East Coast gas supply
Priority Initiative
Location
National
Geography
National
Category
Efficient Markets
Problem/Opportunity timeframe
Near term (0-5 years)
Proposed By
Infrastructure Australia identified initiative
Date added to the IPL
17 February 2016

Problem

The 2015 Australian Infrastructure Audit identified a potential gas supply shortfall in the eastern gas market as a result of increased domestic and export demand. Reduction in production in the Gippsland basin is also expected to contribute to the shortfall in supply.

In the absence of additional supply, this increased demand is expected to lead to higher prices. The Northern Territory has the potential to provide price-competitive gas, but is only linked to the eastern gas pipeline network at Mount Isa.

Providing a connected national energy market with sufficient capacity to supply domestic and foreign markets, withstand supply shocks and market forces, and contribute to Australia’s broader environmental goals will support the resilience of the national economy.

Proposed initiative

The initiative proposes to develop infrastructure to connect Northern Australian gas reserves to the eastern gas markets.

A project to construct a pipeline between Tennant Creek and Mount Isa, connecting the Northern Territory gas supply with the eastern gas market, was completed in 2018. This provides some additional supply to the eastern states, and supports economic growth in the Northern Territory.

Additional pipeline connections are currently being considered, including connections between Alice Springs to Moomba and Alice Springs to Tennant Creek.

The feasibility of these initiatives will depend on future gas demand in the eastern states and the viability of new gas fields in the Northern Territory.

Next step 

Proponent(s) to be identified.