Logistics, Ports & Terminals, Mining and Heavy Industries

Canberra-backed gas pipeline slammed by WA minister

Western Australian mining minister Bill Johnston has reportedly dismissed the idea of a gas pipeline linking the state to the east coast, despite support for the idea from key ministers in Canberra.

The $5 billion project, which has been discussed on-and-off for the past few decades, was highlighted earlier this month by former WA premier Colin Barnett.

Barnett’s Liberal/National alliance was crushed in the March election by WA Labor, led by new premier Mark McGowan.

Nonetheless, the former premier was in the news last week suggesting the pipeline as a boon for Western Australia, and a possible solution to the price crisis facing east coast gas buyers.

The plan drew the attention of Prime Minister Malcolm Turnbull, and the support of federal finance minister Mathias Cormann and energy minister Josh Frydenburg.

But Bill Johnston, who was named by McGowan as the new WA mining minister shortly after the state election, reportedly slammed the idea in an interview with The Australian this week.

“Let’s understand what would happen if you build a pipeline from the west coast to the east coast: they’d export more gas from the east coast,” Johnston was quoted as saying.

“It still doesn’t solve the problem if you still don’t have a domestic gas reservation plan. You need to make sure your country has the energy security it needs.”

Johnston says other states should follow WA’s lead in its policy, which reserves 15% of gas from LNG projects for the domestic market.

The discussion this week follows a failed meeting between Frydenburg and east coast gas executives over how to secure affordable gas in the market, which is seeing price increases industry groups have labelled unmanageable.

The crisis is mostly caused by increased export volumes as a result of a trio of gas export facilities coming online at Gladstone in Queensland in recent years, but the problems are compounded by gas exploration moratoriums in several states, and several other factors.

The ACCC recently launched an inquiry into the market.

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