Selected NEGI route to adversely impact gas prices, says SA Treasurer Koutsantonis

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Image credit: FreeDigitalPhotos.Net User: by supakitmod

South Australian Treasurer Tom Koutsantonis has expresses concerns that the chosen route for the North East Gas Interconnector (NEGI), which runs through Tennant Creek in the Territory and Mt Isa in Queensland, will have a negative impact on gas prices.

Image credit: FreeDigitalPhotos.Net User: by supakitmod
Image credit: FreeDigitalPhotos.Net
User: by supakitmod

Mr Koutsantonis called on the newly-appointed Federal Resources, Energy and Northern Australia Minister Josh Frydenberg to consider the southern route as a much more viable option for the NEGI pipeline.

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

“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 South Australian Government was pushing for the more efficient southern routes proposed by both DDG Operations and Pipeline Consortia Partners Australia, which envisioned connecting the onshore gas fields in the Northern Territory to the eastern market through existing infrastructure at Moomba in South Australia’s Cooper Basin.

Mr Koutsantonis urged Mr Frydenberg to intervene and protect consumers in the eastern gas markets from higher energy prices.

“He should list the issue for discussion at next month’s COAG Energy Council in Canberra. The findings of the ongoing Australian Competition and Consumer Commission (ACCC) inquiry into south east gas prices should also be taken into consideration,” the Minister said.

“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. 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.”

According to Mr Koutsantonis, 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,” the Minister concluded.