GAS

Pipeline players need to grab onto gas horns

FEDERAL Resources and Energy Minister Martin Ferguson has urged the pipeline industry to position...

Pipeline players need to grab onto gas horns

He acknowledged the industry faced challenges that included competing with international rivals for work and the major LNG export projects for labour.

"However, such pressures from growth are preferable to the alternative, which is lack of growth and economic stagnation," Ferguson said.

He said the government did not support mandating local content, saying it risked making Australian projects more costly, less viable and less attractive compared with other investment decisions.

He said the award of a $120 million contract for polyethylene pipe from QGC to Fletcher Building, allowing development of a new manufacturing facility in the Toowoomba region, was an example the benefits from the big gas projects were being felt.

Ferguson said the government was watching the gas market in the east coast where gas prices on the spot market were low due to an abundance of ramp-up gas but where it was difficult to secure long-term contracts.

"Until exports out of Gladstone begin in three or four years, this uncertainty in east coast gas markets is likely to continue," he added.

However, he said the pipeline industry should not be concerned about ongoing reform targeting greater public accountability around the way gas markets operated.

"Given the significant change currently occurring in our energy markets and the expectation that over the next 20 years we will see a significant increase in the use of natural gas as a flexible, reliable and lower emission energy source for our electricity generation - driven in no small way by our carbon price reforms - this transparency is important."

He said the transformation of the gas and pipeline sectors were an opportunity for the Australian pipeline industry to expand and maintain the role it played in the country's economy and society.

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