Negotiations between the Tasmanian Gas Pipeline and Hydro Tasmania have been far from fruitful in regards to talks about future gas supply contracts.

The Tasmanian Energy Security Taskforce recommended arrangements be in place before June this year. 

The current arrangement between TGP and Hydro is due to expire at the end of 2017.

TGP has forecast that gas prices could increase by up to 95 per cent if a deal is not struck between the two parties.

Energy Minister Guy Barnett has the power to exercise an arbitration mechanism should negotiations break down completely.

Grange Resources chief executive Ben Maynard said he believed the state should purchase the underwater gas pipeline because it could provide “some real potential … from an energy security point-of-view” and so “fully utilise” the asset.

”Sometimes when this is synthesised to commercial discussion around provision of the pipe, that’s where I feel maybe the benefit to the local businesses and our people could be lost or put on the back-burner,” Mr Maynard said.

“An outcome for Tasmanian businesses, for community, for people, may look a little different than just commercial negotiation over the pipe.

“There are a lot of businesses that would benefit from it that can’t get access to the pipeline at the moment.”

Opposition energy spokesman Scott Bacon said the government was “playing a dangerous game by letting the contract uncertainty drag on”.

“The government’s inability to guarantee a deal has created enormous uncertainty for Tasmania’s biggest gas users, including Bell Bay Aluminium and Grange Resources,” he said.

“How is [Mr Barnett] going to resolve this standoff between Hydro and the Tasmanian Gas Pipeline?”

Mr Barnett said the gas pipeline was not for sale and thus public acquisition was not on the table.

He said negotiations between TGP and Hydro were “positive”.

“We are confident future arrangements will be in place well prior to the expiry of the contracts, however arbitration is an option if a resolution is not forthcoming,” Mr Barnett said.

A Hydro spokesman said the government business was “determined to get a fair and reasonable arrangement for Tasmanians”.

He said Hydro would prefer to reach an agreement with TGP than to exercise arbitration.

“​Public ownership isn’t something we’ve considered,” the spokesman said.