PERTH (miningweekly.com) – The Queensland government has placed a proposal before the federal government seeking funding for new gas pipelines in exchange for Queensland gas resources.

Natural Resources and Mines Minister Dr Anthony Lynham over the weekend said that the package of initiatives was aimed at tackling the looming east coast gas shortage.

“Urgent action is required to increase domestic gas supply to protect industry and to secure jobs,” Lynham said.

“Queensland is already ahead of the pace with the measures we have under way, including land on offer where the gas will be for sale in Australia only. We are looking at further and larger land releases in the Surat basin with the same Australian market conditions.

“There is a lot more that can be done, and we believe those actions should be funded by the commonwealth in the national interest.”

The state government’s proposals included a jointly funded study into infrastructure options and guaranteed funding, possibly from the North Australia Infrastructure Facility, for any viable options, like new pipelines, that will deliver gas to the Australian market.

“Access to new pipelines would make all the difference in opening up new potential gas producing areas like the Bowen and Galilee basins,” Lynham said.

The resources sector has welcomed the initiative from the Queensland government, with Queensland Resources Council (QRC) CEO Ian Macfarlane saying that it will pave the way for more gas supply into the east coast market from the Bowen and Galilee basins.

“It’s common knowledge the eastern seaboard of Australia is facing a gas shortage and instead of putting their head in the sand the government is looking at how to fix the problem,” Macfarlane said.

“This is another proactive step by the Queensland government following an announcement of new land releases in the Surat basin for gas exploration.”

The Australian Petroleum Production and Exploration Association (Appea) has also welcomed the proposal, with Queensland director Rhys Turner saying Minister Lynham's willingness to engage with the commonwealth, including to develop new pipeline infrastructure, echoed what the industry had been saying for some time.

"Developing new fields to bring more gas to market is the most important part of the equation right now," Turner said.

"Exploration is at a 30-year low. Regulatory costs and delays are discouraging development as well as adding to the cost paid by our customers.
  
"We must also avoid an infrastructure deficit. Queensland has promising gas fields that can be developed in the Galilee and Bowen basins. Unfortunately, there is a real risk that this gas may be stranded because of a lack of pipeline infrastructure.

"The first, best solution is private investment in competitively priced infrastructure. However, if the market fails, Lynham's call for the commonwealth to support infrastructure has merit and is worth considering,” he stated.