Another privately owned pipeline will fuel the ‘East Coast gas price crisis’: IEEFA

Responding to the construction of a new 622 km-long Northern Gas Pipeline owned by private business Jemena, Bruce Robertson, Gas/LNG Australasia analyst for the Institute for Energy Economics and Financial Analysis (IEEFA) said:

“Another privately owned pipeline in Australia will only fuel the gas price crisis, not lesson it as the majority of such pipelines are not subject to any pricing regulation and are hideously profitable.

“There is indeed a gas price crisis here, but this because the Australian gas cartel is restricting supply to the domestic market in order to force up the price. These rorts are sending Australian businesses broke.

“Global gas prices have crashed and prices in our key markets are below those in Australia.  This is an unacceptable position for Australian gas consumers.

“The onshore gas industry in Australia has consistently underestimated and avoided revealing the costs of production.

“In the Northern Territory, production costs of extracting unconventional shale gas have been estimated at A$7.50/GJ by Core Energy in a report commissioned by the South Australian Government.

“If this gas is to travel through the Northern Gas pipeline, the landed price at a metropolitan market in the eastern states would be in excess of $11/GJ. This is well above the current price of gas available out of the Bass Strait, which already has manufacturers unable to face gas bills.

“It is also over twice the price of Australian gas delivered to the Henry Hub in the US.  Australian gas prices are globally uncompetitive and the Northern gas pipeline will only serve to raise domestic gas costs.

“It is an outrage that the Australian government is allowing the gas cartel to rort the public and businesses like this. In any other country there would be rioting on the street.”

HoldfastAnother privately owned pipeline will fuel the ‘East Coast gas price crisis’: IEEFA