The problem is uncertainty and lead time. Infrastructure...

The problem is uncertainty and lead time. Infrastructure projects need certainty.

Current uncertainties

1. TBN is only now approaching FID on its pilot project. First gas in 12 months perhaps.

2. To build a $5bn+ 1000km+ fat pipeline to the east coast requires substantial upfront multi-decade binding take or pay agreements. TBN can’t commit till it has a lot of wells in production and it can’t build a lot of wells till it has a pipeline.

3. Politics - government keeps changing the rules

4. Transport costs on a fully commercial basis to Melbourne are likely to be well over $8/Tj - that’s a big step up in costs to business and retail

5. If the renewable plan is achieved (big IF), highly intermittent demand for gas generated power means that transport costs could be much, much higher. Pipeline owner needs 10-20yr contractually certain revenue to raise project finance, not pay as you go.


Government has funded the National Reconstruction Fund with $15bn to ‘crowd in’ private capital. Their gas strategy effectively recommends doing this. Given the lead time and the chicken and egg problem (no fat pipeline, no Beetaloo), they will have to do something.

Next year’s election + cost of living crisis + energy crisis = pipeline underwriting decision.