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Liquid natural gas (LNG) is expensive, complicated and emission intensive. So why not export Australia's natural gas to Asian markets instead by cheaper, cleaner pipeline?
A 'common-carrier' gas pipeline between Australia and Southeast Asia would fit well with existing and planned regional infrastructure. It could also reduce the economic costs, environmental hazards and technological obsolescence risks posed by LNG.
DESERTEC-Australia believes that a system of High Voltage Direct Current (HVDC) power lines and natural gas pipelines laid side-by-side between Australia and southeast Asia could benefit the entire region by creating an unified, integrated, security-hardened energy infrastructure.
The ideas are outlined in "2050: Australia-Clean Energy Superpower."
Natural gas is currently shipped to market either by pipeline in its native form or by tanker as compressed liquid natural gas. LNG has to be carried around 2,000 kilometres by tanker before it is considered more economical than natural gas transported in a pipeline.
Given that labor comprises roughly 50 per cent of a pipeline's cost, laying a regional natural gas pipeline at the same time as regional High Voltage Direct Current (HVDC) power line would reduce the labor costs of laying each by, say, 25-30 per cent. This would extend the LNG/pipeline 'crossover' point to roughly 2,500 kilometers.
Then, LNG carbon emissions need to be taken into account.
Compressing and freezing natural gas into liquid natural gas for shipping and then uncompressing it and unfreezing it at the other end is very energy intensive. When the carbon costs of this are taken into account, the crossover point expands to roughly 3,500 kilometers. That's 70 per cent of the distance from Port Hedland, Western Australia to Guangdong in southern China, where major LNG receiving terminals for Australian natural gas are planned.
Additional efficiencies would be gained through a 'common carrier' regional delivery infrastructure instead of an emerging 'dog's breakfast' of patchworked, bilateral networks. These 'common carrier' regional efficiencies would further close the gap between pipeline and LNG tanker delivery.
Integration opportunities already exist. For instance, an Australia-China pipeline could interconnect with the Trans-ASEAN Gas Pipeline (TAGP) planned by by the 12-nation Association of Southeast Asian Nations or the China/Palawan natural gas pipeline planned by China to Philippines. This would reduce costs further.
Another way to reduce costs would be through routing the Asian leg of the natural gas pipeline/HVDC infrastructure overland through Indonesia, Malaysia, Thailand and Laos.
Australia would benefit by avoiding duplication of domestic infrastructure. To take one example, Queensland LNG export ports for coal seam methane gas might become unnecessary. Instead, gas supplies could be piped to Darwin or Port Hedland along 'rights-of-way' granted for other planned projects such as Iron Boomerang.
In northwest Australia, costly and environmentally contentious land-based LNG trains would become unnecessary, reducing complexity in the delivery chain.
A flexible, integrated multipurpose energy delivery infrastructure would create a truly regional energy market. That, in turn, would remove impediments to the marketplace channeling investment to the cleanest and cheapest future low emission energy sources.
In the second half of the 21st Century, regional pipelines originally used to carry natural gas could be repurposed to carry other energy resources, like hydrogen. Flexible infrastructure eliminates the 'stranded asset' risk posed by building expensive LNG trains that future carbon pricing may render uneconomic.
This matters because recent research indicates LNG offers 'false economies' as a delivery medium for natural gas due to its capital-intensive nature and large energy requirements. These are shortcomings carbon pricing will ruthlessly expose.
Templates for subsea pipeline projects exist in the Langeled pipeline between Norway to the UK, the proposed NordStream pipeline between Russia and Germany and, of course, TAGP.
Flexible, reconfigurable infrastructure reduces energy market delivery friction. This frees the marketplace to engage in 'price discovery' of optimal, low emission energy resource mixes. This will be crucial in the battle against destructive climate change.
Stewart Taggart is a director of Acquasol Infrastructure Ltd., a developer of environmentally-friendly power and water solutions building a municipal-scale solar desalination plant in South Australia's Upper Spencer Gulf. Stewart is also founder/administrator of DESERTEC-Australia, DESERTEC-USA and DESERTEC-China. DESERTEC promotes the concept of "Clean Power From Deserts."
Additional Reading:
Northwest Shelf Investment
New Blow for Gas Export Push, The Age, March 9, 2009
Woodside, Chevron May Delay LNG Projects on Turmoil, Bloomberg, October 13, 2008
Freer Regional Trade In Energy
Australia signs up for ASEAN free trade deal, The Age, February 28, 2009
Civil Society Opposition to LNG Plants in Northwest WA
Garrett will veto gas plant site: bandmate, The West, March 28, 2009
Greens and Chevron set to face off over Gorgon vision, The West, March 13, 2009
Aborigines angry over WA port plan, Sydney Morning Herald, November 24, 2008
Pipeline Technology
Leighton Invests in New Pipelayer, Energy Current, December 29, 2008
Background: Langeled Pipeline
Background: NordStream
LNG-Carbon Trading
Woodside ‘Remains Dismayed’ at Australia Carbon Plan, Bloomberg, March 10, 2009
No special carbon deal for LNG: Rudd, The West, November 23, 2008
Emissions scheme threatens LNG, The Age, September 25, 2008
Emissions trade to 'cut LNG profits 15 to 30pc', The Australian, September 17, 2008
Editor's Note: Editor's Note: This opinion was provided by DESERTEC-Australia, please click here to sign up to their mailing list. This article is under copyright; permission must be sought from DESERTEC-Australia in order to reproduce it.
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