The price of gas transportation could increase by up to 95 per cent for major industrial users in the wake of disagreements over costs, according to the owner of the state’s gas pipeline.
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On Wednesday, Tasmanian Gas Pipeline said it had begun communications with major industrial gas users following years of negotiation with Hydro Tasmania over a new gas supply contract.
The parties have so far been unable to reach an agreement over the new contract, which relates to Hydro Tasmania’s Tamar Valley Power Station, and is set to expire at the end of this year.
The Tasmanian Energy Security Taskforce recommended arrangements be in place before June this year.
Hydro Tasmania chief executive Stephen Davy said he was still working closely with TGP to secure a deal.
But TGP chief executive Lindsay Ward said he had run out of time.
“With the gas transportation agreements for a number of major industrials coming to an end, we have been required to lock in pricing moving forward and without an agreement with Hydro Tasmania for TVPS, we have had no choice but to significantly increase our charges,” Mr Ward.
“Hydro Tasmania was aware of the fact that agreements with major industrials were coming to an end.”
Mr Davy said he was confident there would be an arrangement made at the end of this year.
“We are working with customers to make sure that we understand and mitigate the impacts on them,” he said.
“The owners of the pipeline are very tough commercial operators and we’ve been very focused on making sure that we get a deal that works well for all of Tasmania.
“We don’t accept that the offer they’ve made for us is acceptable to Tasmania.”
Energy Minister Matthew Groom said the government encouraged all parties to negotiate in good faith and secure fair outcomes.
“We stand in support of the major industrials on this issue and will continue to do everything we can in partnership with them to ensure Tasmania's interests are fully protected,” Mr Groom said.
Opposition energy spokesman Scott Bacon said it was “beyond belief” that a deal had not yet been done.
“What we want to see really is this issue resolved in the best interest of Tasmanians,” Mr Bacon said.
“We’ve got serious concerns about small businesses and residential users of gas that there will be flow on effects to their bills as well.”
