Is it time to re-visit the gas to Queensland project?

The PNG proposal would only supply the domestic Australian market.

I recall at the time the per unit cost of CSG gas was about FOUR times the landed cost of gas from PNG.

The AGL consortium signed up a significant number of commercial customers - actively supported by senior PNG Ministers.

The construction cost was around $3.5 billion - with a construction timetable of about three years.

So why did it fall over so abruptly?

Firstly, there was a fear and smear campaign on two fronts. The first was that there were claims native title approvals on Cape York (for an underground pipe) would be difficult to secure. This was never tested and ignored the significant royalties etc that would be available to landowners.

The second, and I found this to be a racist claim, was fear that the reliability of supply, including Country risk issues, could not be guaranteed.

Indeed, one Australian politician told me it was just too great a risk that "natives" in PNG would disrupt the project!

But it subsequently became apparent the real undermining of the project came from the American dominated PNG Gas Project consortium.

They wanted the PNG Government to focus on the PNG Gas Project; on securing approvals and the funding of the state and landowner equity.

It defies comprehension they genuinely believed there was a big enough resource to service both projects. That was complete nonsense and ignored the reality there were also substantial stranded gas resources even closer to Northern Australia that could be tapped for the Gas to Queensland project.

I suspect the US led consortium wanted all of PNG's gas to be exported via its pipeline and vessels via negotiated contracts.