Via The Age comes insanity turned normal:
Victoria is angling for a massive floating liquefied natural gas import facility to allow the state to buy gas from overseas to help tackle a serious supply crisis.
Despite the state’s potentially enormous gas reserves in Bass Strait, and Australia’s position as one of the world’s largest exporters, the Andrews government is understood to be in active talks with energy giant AGL to build a floating LNG import terminal close to Melbourne, possibly in Western Port.
The terminal, which would supply the east-coast gas grid, would allow Victoria, NSW and South Australia to import lower cost gas, potentially from the US or Western Australia.
Premier Daniel Andrews is expected to press the plan at a Council of Australian Government’s meeting on Friday, along with a new proposal to help prevent local manufacturers and households from being denied access to cheaper gas because of big export contracts to Asia.
The state government is understood to have offered to “fast track” the environmental and planning approval process for the facility, which would be likely to cost $200 to $300 million, although the decision would ultimately lie with the Commonwealth.
Victoria is believed to be seen as a favourable option, partly because it is located between NSW and South Australia, which would lower pipeline costs, and partly because, unlike NSW, it already has significant storage capacity at the Iona plant, near Port Campbell in the state’s south-west.
This will deliver gas at around $10Gj which for contract users will help bring the current asking prices at double that:
But, make no mistake, this remains completely insane. Asia doesn’t want the gas that QLD is throwing at it for $7Gj (local price $5Gj). The import terminal embeds a whole range of costs that local production does not have. And it will be exposed to oil-linkages and currency fluctuations that will drive up the price of gas the moment Australian conditions weaken, the precise opposite of what’s required.
It absolute lunacy become normal.
