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Jemena selected to build A$800m NT gas pipeline

Jemena selected to build A$800m NT gas pipeline

Photo by Bloombeg

17th November 2015

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

  

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PERTH (miningweekly.com) – The Northern Territory government has selected Jemena Northern Gas Pipeline to build and operate the North East Gas Interconnector (NEGI) pipeline to connect the state’s gas resources to eastern gas markets.

The 622 km pipeline, which will run between Tennant Creek and Mount Isa, in Queensland, will cost A$800-million to build.

More than 900 jobs would be created during construction, 600 of which would be for locals. The project would also offer up to 100 contracts for local businesses worth about A$112-million.

“This nation-building project will generate investment in regional infrastructure and deliver real jobs with no financial commitment from taxpayers. This is a great outcome and shows governments can deliver major infrastructure projects through a robust competitive process,” Northern Territory Chief Minister Adam Giles said on Tuesday.

He added that the pipeline would connect the ever-increasing energy needs of the east coast with the vast gas reserves in the Territory. It is estimated the Territory has more than 200-trillion cubic feet of gas, potentially enough to power Australia for more than 200 years.

“Without this pipeline, the populated parts of Australia would have huge difficulty securing their energy needs.”

Jemena expects construction of its 14-inch pipeline to be completed by 2018. The first supplies of gas to sustain the pipeline would come from existing offshore and onshore gas reserves.

“Building the NEGI will drive commercial exploration and development of currently untapped gas reserves, unlocking the next phase of economic growth for the Territory and helping build a stronger Northern Australia,” Jemena MD Paul Adams said.

“The pipeline is cost-effective and relatively quick to build, so it will support a strong gas industry for the Territory by getting gas to market at a competitive price, accelerating development of Territory gasfields and helping to create jobs and opportunities in the gas industry.

“As further reserves in the Territory are proved up, we can expand our scalable pipeline to meet strong demand from east coast customers.”

The Territory government’s Power and Water Corporation (PWC) would supply gas to the NEGI from its contracted suppliers. The quantity of gas PWC is entitled to under its contracts far exceeds the amount needed to meet the Territory’s energy needs.

PWC will use a gas sales agreement with Incitec Pivot to lock in a guaranteed gas supply for about ten years from the completion of the NEGI to 2028.

The resources sector has been quick to welcome the Territory government’s decision, with Australian Petroleum Production & Exploration Association (Appea) CEO Malcolm Roberts saying it was an important milestone in developing a new gas pipeline linking the Territory to the east coast gas market.
 
“By the time it is built, we are likely to see some tightening of supply on the east coast so the timing is very good.”

“The NEGI is a pipeline of opportunity. By stimulating gas exploration and production in remote areas of the Territory, it will help deliver tangible, long-term job opportunities in regional centres and indigenous communities,” he said.

The Queensland Resources Council (QRC) also said the NEGI would fill an important missing link in the Northern Australia gas market, connecting rich resources in the Territory with east coast markets by 2018.

“This is good news for Queensland, and even better news for the North West, which will benefit from construction jobs for the project and have a domino effect that will stimulate new projects and more jobs in the region,” QRC CEO Michael Roche said.

“The cost and reliability of energy into the state’s North West minerals province has long been a constraint on regional growth and a barrier to new projects and local investment.

“Connecting gas to Mount Isa will uncork the growth genie and create a broader economic benefit for industry, and with it, new job opportunities.”

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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