Price bounce on turnover, page-7

A bit of critical thinking is needed here to get through the Government spin.

The proposed link is between Moomba and Alice Springs. APA has a good rundown in some of its presentations. They are spending about $1 Million on a scoping study this year. Even in a best case scenario it is probably four years away from being completed. Peak gas shortages on the east coast are forecast in 2016-2018. Hence the pipeline is not going to solve anything in the short/medium term.

The other issue you need to consider is that any gas coming from off the WA coast to NSW will also be competed for by the LNG plants in WA/Darwin. It is basically the same scenario that we are in now in Qld. The gas price in the east coast will still rise toward Asian markets.

APA is keeping its options open in case of material new discoveries in Cooper or Georgina basin unconventional gas. The Cooper unconventionals are probably 4+ years away from large scale production and Georgina Basin even longer given lack of infrastructure. It's kind of a chicken and egg scenario, APA won't be punting on these gas discoveries before it makes an investment decision but the pipeline probably needs these discoveries to be viable.

In any case its best to forget about what the Government has to say on the issue.