How will a new gas link improve energy security?

Making sure energy supplies are up to the task of dealing with future demand is high on the agenda for many governments at the moment.

With a growing population and the demand for electricity and gas suppliers more prominent than ever, it's hardly surprising that authorities are searching for new ways to meet demand.

The Northern Territory government is no exception to this rule, as it has announced plans for a gas pipeline that would link gas grids in the region up with those along the east coast of the country.

This would lead to a more reliable and sustainable energy source for many homeowners and businesses, potentially bringing down gas prices in the process.

Getting the gas pipeline off the ground

Investors first need to be found before the project can go ahead - and Chief Minister Adam Giles believes there is no time to be wasted.

He emphasised how eastern states "are fast approaching an energy security crisis", which is why this initiative needs to get underway sooner rather than later.

"We have the gas and they have the demand but there is currently no economically viable way to get the gas from Northern Australia to the eastern market," acknowledged Mr Giles.

"With an east coast gas crisis shortage looming, we need the pipeline to be operational by 2018. There is no time to waste and the granting of Major Project Status to the pipeline will help speed up this process."

At the moment, two routes have been suggested for the new pipeline - one will run from Tennant Creek to Mount Isa in Queensland, while another spans from Alice Springs to Moomba in South Australia.

Investors are being asked to accept either one of these routes, or perhaps propose a feasible alternative of their own.

Exploring the benefits of a new gas line

The government anticipates that this new gas line will open up a host of opportunities for local suppliers and perhaps even encourage greater competition in the market.

As supplies dwindle, customers could end up paying more than necessary for their gas, so any attempt to counter this should be encouraged.

A report released by the Grattan Institute last year showed gas prices are at risk of spiralling out of control in Australia.

Titled Getting gas right: Australia's energy challenge, the study found that households could see prices increase as much as $170 a year as the country's liquefied natural gas export industry grows.

One of the greatest issues facing the market at the moment is a shortage of supply, which the Grattan Institute suggested has the greatest potential to impact New South Wales.

As a result, it believes sufficient infrastructure will need to be put in place to make sure gas is able to flow properly - which may include this latest project in the Northern Territory.

The next steps

Formal expressions of interest for the new project are due to open at the end of next month and in the meantime, the benefits of investing are to be promoted throughout the nation.

A briefing is being held in Alice Springs on October 31, which will give investors further opportunity to explore what is on offer and decide whether it is right for them.

"I have asked our consultants, Port Jackson Partners, to run a briefing for gas and infrastructure companies, as well as other industry figures interested in being part of this nationally important project," noted Mr Giles.

It's hoped the gas pipeline will be fully operational by 2018 and granting it Major Project Status should ensure this deadline is met without delay.

Posted by Richard West