Development of the natural gas and oil industry in Australia began during the late 1960s with the construction of a number of single-producer, singlemarket pipelines. By 1987, the basic framework of the delivery system was completed and natural gas was available in all mainland states of Australia, although principally supplying state capitals and major centres of industry. Typically, gas was supplied from one production source operating as a monopoly, to government-owned utilities functioning as monopolies, which then sold gas to consumers. Natural gas was traded across state boundaries only to a very limited degree and competition was not encouraged.
Crude-oil pipelines have not developed in Australia beyond a limited system with some onshore piping in Queensland and in South Australia. Instead, as Australia’s refineries are all coastal, crude oil is shipped around the coastline. Certainly there are gathering systems and pipes to loading terminals, but crude oil is not transported by pipelines to any great extent in Australia, nor is refined product.
The 1990s was the decade of transformation for the natural gas industry in Australia. In the early years, government pipelines and utilities were privatised and competition was introduced. All along the gas chain, private companies purchased assets and formed stand-alone entities; gas transmission became a clearly distinguishable industry with separate interests and concerns. As barriers to gas supply and development were dismantled, the industry flourished.
Today, Australia has some 20,000km of natural gas transmission pipelines, compared with 9,150km in 1990. This growth, in a nation of only 20 million people with thin natural gas markets, is a major achievement in the history of Australia’s infrastructure development – and almost exclusively financed and led by the private sector. Furthermore, some of the most significant construction activity has led to the connection of major systems and the emergence of pipeline-on-pipeline and gas-on-gas competition in major markets.
Figure 1: Transmission Pipelines (1985)
Australia has reserves of around 157,000 petajoules (PJ) with annual production in 2002 totalling 1,200PJ. This means that Australia has around 130 years of gas supply at current rates of production. The bulk of the nation’s gas reserves are found in the north and north-west, but the largest markets exist on the southern and eastern coastlines. A number of industry professionals hold the view that a major transnational pipeline from the north or north-west, forming a major linkage in the national pipeline grid, is necessary to meet a projected shortfall in gas supplies in the southern and eastern markets. What is unclear is the timing of the shortfall. However, major customers in the south-eastern markets are becoming concerned about gas availability and gas prices in the medium to long term. Given that some forecasts suggest a shortfall arising as early as 2008/2009, immediate action is necessary given the lead times for pipeline approval and construction.
Figure 2: Transmission Pipelines Existing and Planned (2003)
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Transportation
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