The government could subsidise gas pipelines in northern Australia in addition to providing a loan for Adani to build a rail line from its proposed Carmichael mine, Malcolm Turnbull has said.
In an interview with ABC Brisbane on Thursday to spruik the government’s plans to impose export restrictions on natural gas, the prime minister said it was considering a Northern Territory pipeline and the Northern Australia Infrastructure Facility (Naif) could support pipelines in Queensland to ease gas shortages.
Asked if a pipeline from the Galilee and Bowen basins could increase gas supply and lower prices, Turnbull said “that would be a great development”.
Asked if the Naif would have to choose between funding a pipeline or giving a $900m concessional loan to Adani for a rail line from the Carmichael mine, Turnbull said “there’s no reason you can’t do all of the above”.
Turnbull said the proposed Adani loan would be “concessional but it’s not free money”.
He said the Naif board assesses investment opportunities independently and would have to be satisfied that the loan “will be repaid and that the interest cost will be covered”.
“So it’s a commercial loan in that respect. But it can be in the public interest more generous, if you like, to the borrower than a loan from a bank would be.”
Turnbull said that he “absolutely agreed” that Australia needed more pipelines.
“We are looking at a number of proposals, including one to bring gas from the Northern Territory into the east coast system, but more gas pipeline infrastructure in Queensland would be very welcome.”
Turnbull said the government would be “delighted” if Naif examined new pipeline proposals and he did not need to direct resources and the northern Australia minister, Matt Canavan, to work on it because he was enthusiastic about developing resources in Queensland.
“This type of pipeline infrastructure is critically important,” he said, adding it was the type of project that Naif was designed to support financially.
“So if the Queensland government or anyone else has got a proposal for pipeline infrastructure in northern Australia, then they should be getting their plans into the infrastructure fund as soon as they can.”
The Turnbull government has announced a plan to impose export controls when there is a shortage of gas in the domestic market.
Turnbull said the government would act on advice from the energy market operator and Australia’s competition watchdog before imposing restrictions but said it was “not a threat”.
“There will be export controls. They will not be able to export gas if that has the consequence of reducing the availability of gas for the Australian market.”
Turnbull said the long-term solution would require Victoria and New South Wales to lift bans on exploration and production of gas but the export controls would help protect Australian jobs in the short term.
The government has met twice with liquid natural gas exporters and has been warning for months it would impose export controls in the event the gas producers did not guarantee domestic supply.
On Thursday Canavan told ABC’s AM the government needed the power to limit exports “but if shortfalls don’t emerge, if gas does come back on to the domestic markets, we won’t need to activate the mechanism”.
“That would be ideal, that would be our preferred outcome.”
Canavan said the government’s meeting with gas producers hadn’t “got us to where we’d like to be”. “We’re still not at the point where our manufacturing sector has adequate supplies of gas.”
Canavan has been a critic of reserving gas for Australian industry, arguing that rationing would limit investment in further production, although the government had left open the option to pressure producers to supply more to the domestic market.
