ACCC urges gas development in NT

PERTH (miningweekly.com) – The Australian Competition and Consumer Commission (ACCC) has urged the Northern Territory government to duly consider its onshore gas development strategy.

ACCC chairperson Rod Sims said at the South East Asia Australia Offshore & Onshore Conference that the Northern Territory had the opportunity to play a significant role in the east coast gas market.

“For the Northern Territory to realise its potential in the east coast gas market it is imperative we have some onshore gas development. We also need to avoid pipeline charges making the cost of transporting the gas to the east coast prohibitive,” Sims said.

Discussing findings from the ACCC’s recent East Coast Gas Inquiry, Sims said it was difficult to envisage where new gas supply would come from in the short to medium term to alleviate the high prices looming for gas users in the south.

“It seems to me that the Northern Territory could play a significant role in meeting demand in the east coast. As we know, there is significant gas in the Northern Territory that doesn't requiring fracking,” Sims said.

He noted that the gas from the Northern Territory could serve as a source of supply for the east coast gas market, adding that the potential job creation and investment in the Northern Territory would go hand in hand with the preservation of jobs and investment which might otherwise be threatened for commercial and industrial users in the south.

“While we do not purport to weigh in on the debate surrounding the environmental issues, we consider that policymakers need to consider the costs or benefits of projects on a case-by-case basis,” Sims said.

“This is particularly pertinent to the Northern Territory given the prospective gas projects are likely to be spread across the vast landscape and potentially represent different levels of risk.”

Sims said the ACCC’s inquiry found pricing at a large number of pipelines on the east coast was well above competitive levels, including on a number of pipelines that gas from the Northern Territory would have to traverse to be supplied into Queensland and/or south-eastern Australia.

“The ACCC welcomes the Council of Australian Governments (COAG) Energy Council’s current consultation on the changes that would need to be made to the coverage criteria under the National Gas Law to pose more of a constraint on this behaviour.

Sims also welcomed the COAG Energy Council consulting further on enhanced pipeline financial information reporting by pipelines so that users, including potential users in the Northern Territory, could more effectively negotiate with pipeline operators.

The Northern Territory government earlier this week imposed a moratorium on fracking in the region, while an independent scientific inquiry is undertaken into the practice.