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SA slams Qld option for NT gas pipeline

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The South Australian Government has responded sharply to a proposal to run the North East Gas Interconnector through Queensland, warning gas prices will unnecessarily increase.

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Treasurer Tom Koutsantonis said yesterday people would pay higher prices for gas after the NT Government nominated Tennant Creek to Mt Isa as the preferred route for the gas pipe, instead of running it through South Australia.

“I am disappointed for the people of the east coast who will be paying higher gas prices as a result of this decision,” Koutsantonis said.

“The economic benefits of a southern route far outweighed the Queensland option, which requires costly, additional processing facilities to be constructed before Northern Territory gas can access markets.”

The SA option is to run the gas pipeline through southern routes proposed by DDG Operations Pty Ltd and Pipeline Consortia Partners Australia Pty Ltd.

It proposed to connect the onshore NT gas fields to the eastern market through existing infrastructure at Moomba in SA’s Cooper Basin.

However, the Queensland option has been welcomed by Australian Pipelines and Gas Association chief executive Cheryl Cartwright.

Cartwright said the Mt Isa route would not require government funding to underwrite the project.

She said the longer Moomba link was likely to require substantial government underwriting.

The selection process comes as the embattled Leigh Creek coalmine is being considered as a site for a gasification project , with the intent of producing gas for domestic and commercial use.

The Leigh Creek Energy Project is developing its plans to start building the gas plant at the mine, which is in its final months of business, by 2018.

The last of the coal produced at the mine is being freighted to Port Augusta power station which will close in March next year, along with the Leigh Creek mine.

Koutsantonis said Federal Resources, Energy and Northern Australia Minister Josh Frydenberg needed to intervene in the gas pipeline selection process to prevent unnecessary higher costs.

“He should list the issue for discussion at next month’s COAG Energy Council in Canberra,” he said.

“The findings of the ongoing Australian Competition and Consumer Commission inquiry into south east gas prices should also be taken into consideration.”

The NT Government invited four proponents to progress to a final proposal stage for the multi-billion dollar project.

“The two proposed southern routes would have provided an all-round better solution to achieving the NT’s objective of delivering onshore gas to southern markets and supporting the supply of gas to eastern customers,” Koutsantonis said.

“By directing gas from through Moomba rather than Mt Isa, suppliers would have been able to access the existing infrastructure within the Cooper Basin and connect more efficiently and directly to the markets in eastern Australia.”

Koutsantonis said Moomba would have provided producers with access to international markets for other gas products, such as propane and butane, through existing export facilities at Port Bonython.

“Northern Territory producers would also have had the additional benefit of accessing the proposed gas trading hub in Moomba, providing greater competition and transparency for the national energy market,” he said.

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