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Energy Resources Division released a report on the "Economics of Gas Gathering and Processing in the Cooper Basin Summary Report" (PDF 6.14 MB) in June 1997.

The objectives of the report are two-fold:

  • To provide indicative production and processing costings for the benefit of prospective explorers in the Cooper Basin.
  • To provide information on the cost of gas field developments to contribute to the current debate on the de-regulation of the gas industry and access to essential facilities.


The results of these studies have been used to provide estimates of:

  • Indicative tolling costs through the existing facilities using the deprival value approach (ie. replacement cost using modern technology and future estimated throughputs).
  • Minimum economic field size based on either stand-alone development or access to existing facilities.

The report does not evaluate whether or not spare capacity is available at existing facilities. However, it does provide an indication of the likely limits of negotiated tariffs where capacity is available.

If plant capacity is available, the negotiated toll will fall between the marginal cost (when there is plenty of spare capacity) and the deprival value cost (when there is minimal spare capacity).

The deprival value approach was selected as the basis forcalculating maximum tariffs because it has a strong theoretical basis and places a ceiling above which tariffs are unlikely to extend. Minimum tariffs were calculated on the basis of marginal (operating) costs.

A reasonable toll based on deprival value ("replacement" cost) for access to existing Cooper Basin facilities (ie.satellite / trunkline / Moomba Plant / Liquids Pipeline / Port Bonython Plant) isestimated to be in the range $1200-$1700/mmscf of raw gas processed.

  • A marginal cost toll is estimated to be of the order of $380/mmscf of raw gas processed.
  • The cost of processing liquids through the Liquids Pipeline and Port Bonython facilities alone, calculated using the deprival value approach, is estimated to vary between $65-$80/m3 ($10.30-$12.70/bbl)
  • Assuming a toll in the deprival value range, it is always more economic to access the existing facilities than build stand-alone facilities for the range of field sizes studied (up to 80 billion cubic feet (bcf) recoverable raw gas).

This conclusion is entirely to be expected, as economies of scale dictate that larger plants will always be more economic if they are fully utilised.

The corollary of this is that if facilities access is provided, smaller discoveries are economic. For example, a liquids-rich gas field containing 4-8 bcf recoverable raw gas within 20 km of an existing satellite and 50 km of Moomba would be economic with access to facilities provided at deprival value tariffs.

The minimum economic size for a liquids-richgas field at this same location and no access to facilities is greater than 25 bcfrecoverable raw gas, (assuming flaring of LPGs is not permitted). Access to current facilities is desirable on resource conservation and environmental grounds. The schematic shows that, for liquids-rich, low-CO2 fields

  1. If recoverable raw gas exceeds 25 bcf and LPG flaring is not allowed, development is economic regardless of whether or not access to existing facilities is provided.
  2. If recoverable raw gas falls in the range between 10 and 25 bcf, it is only economic to develop them on a stand-alone basis if LPG flaring is allowed (ie. there is loss of resource).
  3. If recoverable raw gas is less than 10 bcf, development is only economic with access to existing facilities. However, in this case LPGs are recovered.

Some minor revisions to the report have recently been made. Copies of the report and details of the revisions can be obtained by emailing

A copy of all financial data provided in this report is available from MESA in Quattro Pro for Windows or Excel spreadsheet format (XLS 410 KB). Other organisations can therefore use these data to calculate minimum economic field size using their own cost data.

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For more information, contact:

Energy Resources Division

+61 842 92695