Should we pipe WA gas east? (updated)

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Via The West:

The Turnbull Government is considering a “nation-building” plan to back constructing a gas pipeline from WA to the east as part of a multibillion-dollar push to address the national energy crisis.

Finance Minister Mathias Cormann told The West Australian the Government was considering ways of transporting WA’s gas into east coast markets, including the construction of a pipeline.

“Yes, this is absolutely something worth considering,” Senator Cormann said. “We are currently considering it as part of the work we are doing about improving energy security and affordability.”

Federal Energy Minister Josh Frydenberg said a pipeline from WA was “appealing” as there was an abundance of gas in the west.

“Clearly, the economics need to step up but the Government is very serious about investigating the potential for such nation-building infrastructure,” he said.

…It is understood the Government thinks any new pipeline would need to run either directly from Dampier or from Kalgoorlie to connect with the east coast gas hub at Moomba in South Australia.

Another stupid idea. The WA gas price is already high:

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Piping it east would add at least another another $3Gj is my bet plus drive the price up out West as well. It would literally be cheaper to freeze it at Barrow Island, ship it to Melbourne and unfreeze it. Indeed it would be cheaper to do the same with US gas!

Update

Minister Cormann read the post and provided this further commentary:

“Yes this is absolutely something worth considering, in fact we are currently considering it as part of the work we are doing about improving energy security and affordability.

“Obviously, before taking any potential project like this any further, it has to be properly assessed to ensure it stacks up.

“There are also potentially other options available to supply Western Australian gas to the Eastern States market, which need to be considered at the same time.

“This could be a great opportunity for WA, but there is a lot of homework that needs to be done, to ensure we come up with the best, most appropriate way forward.

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Idea shelved!

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.