From The Australian:
APLNG, which is run by Origin Energy and ConocoPhillips, will underwrite an $80 million pipeline from its big Gladstone-bound pipeline to the Wallumbilla gas hub, where pipelines to Brisbane and Moomba meet. From Moomba, gas can then head to Sydney or Adelaide.
The 50km pipeline will be built from Reedy Creek and will be operated by pipeline giant APA Group.
While the cost of the new pipeline is a drop in the ocean in the multi-billion dollar world of LNG and domestic pipelines, the move is significant because it shows APLNG now thinks it more profitable to sell at least some of its surplus gas domestically than to the two other LNG projects in Queensland — the Santos-run Gladstone LNG plant and the Shell-run Queensland Curtis LNG.
It means more gas will be available, for a price, to southern markets and that Australia’s LNG exports may not be as strong as many had expected.
“Australia Pacific LNG’s strong reserve position provides flexibility,” APLNG chief Page Maxson said.
“Given Wallumbilla Hub’s position as a strategic point in the east coast gas market, this new pipeline will provide us the opportunity to participate flexibly and fully in Australia’s dynamic gas market.”
Potentially good news but not necessarily. The gas may or may not flow in quantities that make a material difference to local prices. It could simply be used to profiteer during times of acute gas shortage on the east coast given ORG is a card-carrying member of the same cartel that has driven up prices.
Domestic reservation is still the only way to ensure that the gas is sold here consistently and in volumes that will matter.
