The development of a natural gas pipeline to Albany and the south coast must be shown to be commercially viable before it can be considered.
Great Southern Minister John Bowler has rejected deliberately misleading statements from Stirling MLA Terry Redman that the State Government was opposed to an extension of the Dampier-to-Bunbury Natural Gas Pipeline (DBNGP) to Albany.
“The proposal for an extension of the gas pipeline to Albany has been around since at least 1999, when the then Department of Resources Development looked at the costs and potential demand and found that even using the most optimistic projections, there was nowhere near sufficient potential demand for gas to justify the enormous cost,” Mr Bowler said.
“The primary need of industry is electricity and gas is currently burnt to provide electricity for the grid which services Albany.
“To extend the pipeline along a route already serviced by electricity transmission lines and then to build a gas-fired power station to produce electricity does not really make sense.
“What is needed to make the gas pipeline viable is an industry or industries requiring large volumes of gas as a feedstock, or where co-generation is part of the industrial process.”
The Minister said that more recently, the proposed Grange Resources iron ore mine, east of Albany at Wellstead, was flagged as a potential large-volume energy user which could bring the pipeline closer to making economic sense.
“Grange Resources examined the options intensively and the hard commercial reality was that the supply of electricity through an upgrade of the grid was found to be a far cheaper and more efficient option,” he said.
Along with the grid extension, a proposed expansion of the Albany wind farm and the prospect of a biomass energy power plant at the Mirambeena Timber Processing Precinct in the near future meant the energy needs of Albany and the region would be met.
“To date, the Great Southern Development Commission, the Department of Industry and Resources and the former Department of State Development have worked with commercial interests to try to identify sufficient demand to justify a pipeline, but so far have not been successful,” Mr Bowler said.
The Minister said Mr Redman had quoted the GSDC as saying that a gas pipeline could generate up to $500million in additional economic activity and up to 700 jobs.
“Those figures are from a 2001 desk-top exercise which assumed customers could be found to take enough gas to warrant a pipeline,” he said.
“Exhaustive investigations since that time have shown that is not the case.
“If Mr Redman knows of potential gas customers of whom we are unaware, I would urge him to come forward and give us the benefit of his knowledge.”
Minister's office: (08) 9222 9699