NSW needs MEL

The slowdown (and possible demise) of the Santos Narrabri gas project demonstrates how desperately NSW gas users, and by inference the NSW Government, needs MEL.

http://www.copyright link/p/markets...e_dive_turns_attention_tsgV3xTofkZ0NGwIWcQmvK

Even if the Narrabri gas project is not ultimately sold off by Santos, it is likely that the reduction in their capital budget will force Santos to reexamine the timing for development.

MEL had certified reserves that would meet more than 15 years of the total NSW gas market. Based on their production trials, MEL obviously were struggling to make their Casino development commercial when gas prices were $2 to $3 a GJ but with gas prices now looking like they will be closer to $10/GJ there should be no doubt that the fields would be commercial, even with no improvement in production rates.

What should be of even more interest to NSW gas users is that the path to get MEL gas into the Sydney market is relatively simple and quick. The original Lions Way Pipeline could link into the Queensland gas pipeline network and deliver gas into Sydney in exactly the same way that QLD CSG is now finding its way into the Syndey market. The even better news is that this pipeline, at a mere 145km, is much shorter than any of the other options currently proposed for meeting NSW future demands - hence much cheaper and quicker to build. Also given the shorter length it is likely that fewer landholders would be affected.

The project had already received Major Project status in NSW and MEL had completed the route selection and environmental surveys. All that is required before construction could commence is the assessment of those studies by the Government. This would shave up to two years off the timeframe to complete the pipeline.

And MEL is already holding the approval to commence production in the Casino area.

Given all this work that has already been completed MEL should be able to supply gas into Sydney well short of two years without needing to rush anything.

Rather than continuing to focus on their fight with the NSW Government, MEL management needs to show the NSW Government how MEL can solve the Government's gas problem relatively painlessly.

And in even better news for the NSW Government, all of MELs existing approvals for the field development and pipeline were awarded by the previous Labor government. Really all the current NSW Liberal Government needs to do is to stand aside a little and let the train initiated by Labor roll forward. The Government should come out smelling sweet - they would have solved the gas crisis and any blame can be sheeted home to Labor.