OREANDA-NEWS. The Australian government plans to enable policies to expand the gas sector in the north of the country, aiming to diversify the region's economy and open up more gas-rich areas for domestic use and LNG exports.

The Liberal-National coalition government yesterday released its policy paper on northern Australia, which hosts nearly all of Australia's 10 LNG projects. It outlined plans to finance spending on road, ports and other infrastructure to help develop hydrocarbon, mineral and agricultural resources.

The development of northern Australia has long been part of Canberra's plans to populate the region, which covers 3mn km? with only 1mn people or about 4pc of the country's population. Yet the region is responsible for more than two-third of Australia's minerals and fuel exports.

The government endorsed a pipeline link between the Northern Territory (NT) and the gas markets in east Australia.

"Such a link has the potential to contribute to a more efficient gas market through infrastructure that links markets, builds resilience and enables new gas resources to be developed," the paper said.

The pipeline, also known as the North East Gas Interconnector, with the NT government having shortlisted four companies to develop the project and plans to make a final decision by September.

The east Australia natural gas market has seen substantial development over the past 20 years, transitioning from an isolated and self-sufficient market to one linked to high-value international gas markets, it said.

"Linking markets will assist in facilitating reform across the sector if commercial realities support the development required to achieve this aim," the paper said.

Canberra in May earmarked A\$5bn (\$4bn) to develop infrastructure such as new rail lines, ports and power supplies in an area of northern Australia straddling the Northern Territory and the northern parts of Queensland and Western Australia.