March 2025, Vol. 252, No. 3
Features
Australia Looks to Development More Gas Pipelines Infrastructure
By Eugene Gerden, International Correspondent
(P&GJ) — The Australian government plans to continue the active development of the domestic gas pipelines infrastructure within the next couple of decades despite the protests of local environmentalists, who expect a sharp drop of demand for natural gas in the country already in the middle term.
Currently, natural gas still has a strategic importance for Australia’s energy security. According to official state statistics, gas meets 27% of Australia’s energy needs and accounts for 14% of its export income. About 80% of Australia’s gas is exported overseas or consumed in the processing of gas for export overseas. A small percentage – just 8% – of Australia’s gas is used to make electricity, with 7% used in manufacturing and 3% used in homes.
Despite the active development of renewables sector of the country and the existing plans to reduce the dependence on fossil fuels (as part of Australia’s plans to achieve net zero emissions targets by 2050), last year the Australian government revealed plans to further increase natural gas drilling and exploration works, stating that gas will remain an important source of energy “through to 2050 and beyond.”
As part of these plans, the government has also said that more investment is also needed for pipelines and storage capacity to transport natural gas to eastern states, in order to ensure their stable supply with gas in years to come. Among these states are Victoria, New South Wales and Queensland, which contain the federal capital Canberra and Australia’s three largest cities Sydney, Melbourne and Brisbane.
Most of these cities had previously been supplied mainly by offshore fields in the Bass Strait between Tasmania and the Australian mainland. However, according to analysts’ predictions, production there will fall significantly in the coming years, so new pipelines’ infrastructure is needed to solve possible supply problems in the future.
In general, according to data of Australian Pipelines and Gas Association, currently Australia operates a generally well-developed gas pipelines’ network, where the first pipeline was commissioned as far back as in the late 1800’s to transport water to the Coolgardie gold fields (and at that period it had the status of one of the world’s longest pipelines).
Currently, the Australian gas pipelines network consists of about 26,100 miles (42,000 km) of natural gas transmission pipelines, which serves over 5 million household and business customers. The entire system is characterized by good safety record, which means there has never been a major gas outage caused by a pipeline incident. However, as the problem of energy shortage in east coast remains pressing, a further development of domestic pipelines’ infrastructure continues to be one of the priorities for the Australian government for years to come.
Despite the protests of local environmentalists, (stating that the country’s emission commitments are already the lowest among G20 nations) Australia is ready to continue the development and expansion of its gas pipelines’ infrastructure. In addition to energy problems in its eastern region, this is also due to the ever-growing demand for gas from major industrial customers, among which are some local mining giants.
That means that the government will continue to provide support to the currently built 600 km of new pipelines and 7,580 miles (12,200 km) of proposed new infrastructure across the country, with the total value amounting to US$16,25 billion (AU$25.8 billion). This is the fourth-highest amount of any country in the world only after such countries as China, Russia and India.
Among the largest existing pipelines in Australia in terms of capacity are Moomba to Sydney Pipeline, South West Queensland Pipeline (Wallumbilla to Moomba) and Moomba to Adelaide Pipeline. However, as part of state plans, new capacities will be added in the middle term. Some may focus on transportation of hydrogen, given the earlier allocation of $US171.5 million ($AU275.5 million) for the creation of five new hydrogen hubs across Australia.
It is expected that building of new pipelines’ infrastructure will be carried out as part of the existing National Gas Infrastructure Plant (the NGIP), which was adopted in 2021 by the government led by the former Prime Minister Scott Morrison from the Liberal Party between 2018 and 2022. The former Prime-Minister was known as one of the main supporters of the development of domestic gas sector, along with infrastructure for its transmission and distribution.
According to some local analysts, the current Australian government, headed by Anthony Albanese from the Labor Party, generally continues this course, paying particular attention to the development of fields in the existing major Australian basins, such as Beetaloo and Narrabri, and the Scarborough gas field in the north-west, by connecting them to some export terminals of the country.
In accordance with the plan, at least one new basin will need to be brought online before 2030 to meet the main targets, particularly the projected east coast gas demand.
According to Australian Energy Regulator (AER), in terms of management structure, most of Australia’s gas pipelines are privately owned. The publicly listed APA Group (APA) is Australia’s largest pipeline service provider, with a portfolio mainly in gas transmission. Other sector participants include Jemena Gas Networks (Jemena, owned by State Grid Corporation of China and Singapore Power International) and Cheung Kong Infrastructure Holdings Limited (CKI Group), which operates Australian Gas Networks. Among the local operators probably Jemena has been involved in the largest investment projects in the Australian pipelines’ sector in recent years. For example, several years ago the company announced its plans for a massive expansion of its Northern Gas Pipeline, the 386-mile (622-km) gas transmission pipeline.
At the moment, the pipeline stretches 386 miles (622 km) from the city of Tennent Creek in the Northern Territory to Mount Isa in Queensland. The current capacity of 90 terajoules per day is set to be increased more than 10 times, reaching 1,000 terajoules per day. Moreover, the pipeline is set to be extended significantly. Two new sections from Mount Isa to the gas hub at Wallumbilla and from Tennent Creek to Darwin are planned.
Overall, the project is expected to cost US$3.5 billion (AU$5.62), while its main objective is to connect up with the Beetaloo Basin in the Northern Territory where large shale gas deposits of up to 200,000 petajoules are said to be located.
In the meantime, another major project involved building of the 590-mile (950-km) pipeline from the Amadeus Basin in the south of the Northern Territory to the gas hub in Moomba, South Australia. Still, due to various obstacles, implementation of the project was postponed.
Perhaps one of the most ambitious projects in the Australian pipelines’ sector these days involves building of west-east trans-Australian pipeline, which is the project to connect Western Australia’s gas resources to the eastern states.
According to some local analysts, only west-east pipeline will help address the energy crisis on the east coast, while also could carry hydrogen in the future. In this case, Australia plans to use the experience of China with its West-East Gas Pipeline network, which is a set of natural gas pipelines, running from the western part of China to the east. These stretch more than 5,400 miles (8,700 km) and delivers billions of cubic meters of natural gas from China’s western gas fields to Shanghai and other population centers in the east of the country.
The idea for building of the new Trans-Australian Pipeline was initially put forward during the 1970s. A 2017 feasibility study estimated it would cost US$ 3.61 (AU$5.8 billion) to build an 1,800-mile (2,900-km) pipeline from Dampier, in WA’s north, to Moomba, in South Australia, near the borders with such Australian states Queensland and New South Wales.
The capacity of the pipeline is estimated at 554.82 MMcf/d, however the Australian government has serious concerns about the possible drop of the demand for natural gas in the country by the day of expected commissioning of the pipeline close to 2028-29.
This is, however, is contrary to earlier statements of Steve Davies, chief executive officer of the Australian Pipelines and Gas Association, who said gas is the second largest source of energy in Australia currently and “the demand is not forecast to decline for more than a decade, so ensuring reliable supply is crucial to future prosperity.”
In general, the government hopes that active development of domestic gas pipelines’ infrastructure will ensure domestic gas prices remain internationally competitive and will allow the country to avoid a sharp rise of gas prices, similar to those in Europe in 2022 after the beginning of Russian-Ukranian war and which created serious problems for some major EU economics.
The importance of development of both gas producing and transmission capacities for Australia within the next decade is also confirmed by some independent local analysts.
According to earlier statements of Griffith University senior lecturer Alexandr Akimov, which were made in an interview with Australian ABC business paper, domestic and international factors had changed since the 2017 feasibility study, while geopolitical risks, such as the war in Ukraine, made it more sensible for Australia to ensure its self-sufficiency in gas, and a cross-country pipeline that could also carry hydrogen was worth discussing.
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