Gas boost for Mount Isa

Posted November 17, 2015

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In what’s a much-needed shot in the arm for north-west Queensland, the Northern Territory government has confirmed plans to run gas to the east coast through Mount Isa.

It  has nominated Jemena Northern Gas Pipeline Pty Ltd as the successful tenderer to construct and operate the North East Gas Interconnector (NEGI) Pipeline to connect NT gas to eastern gas markets.

The pipeline will cost $800 million to construct and will run for 622km between Tennant Creek in the Northern Territory and Mount Isa in Queensland.

Northern Territory Chief Minister Adam Giles said the market had responded extremely positively to the challenge issued by the Northern Territory government to connect the NT to the eastern gas markets and take another step to a truly national gas grid.

“Since I launched the process in Alice Springs at the end of October last year, the interest in and competition for the pipeline has been strong. The level of interest from international and domestic pipeliners indicates the government’s decision to conduct a competitive process was the right one,” Mr Giles said.

Construction of the NEGI will create more than 900 jobs during construction, 600 of which will be for locals and offer up to 100 contracts for local businesses worth about $112 million.

There will be ongoing maintenance and operations teams based in Tennant Creek and Mount Isa.

Jemena expects construction of its 14 inch pipeline to be completed by 2018. Proponents to the NEGI competitive process made their own evaluation of two potential routes to connect the existing gas pipeline in the NT with the east coast gas network.

Mr Giles said the proposal from Jemena was compelling as it offered cheaper tariffs, cheaper gas processing costs and the option to increase the capacity of the pipeline prior to the laying of the first pipe if market conditions support increased capacity.

This nation-building project would generate investment in regional infrastructure and deliver real jobs with no financial commitment from taxpayers, Mr Giles said.

“This is a great outcome and shows governments can deliver major infrastructure projects through a robust competitive process,”  he said.
“The pipeline connects the ever-increasing energy needs of the east coast with the vast gas reserves in the Territory. Without this pipeline, the populated parts of Australia would have huge difficulty securing their energy needs.”

It is estimated the Territory has more than 200 trillion cubic feet of gas – potentially enough to power Australia for more than 200 years.

All royalties from the onshore oil and gas industry will go towards the vocational education and training and other areas of the education sector.

The NT government’s Power and Water Corporation (PWC) will 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 NT’s energy needs.

 

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