Jemena says NT pipeline extension could solve east coast gas crisis

from AFR today
extract only

Energy company Jemena said an expansion of its $800 million Northern Gas Pipeline to south-east Queensland could help alleviate the looming east coast shortage by putting an extra 600 terajoules of gas each day into the domestic gas market.

As Prime Minister Malcolm Turnbull announced restrictions on gas exports to help divert more gas for domestic users, Jemena on Wednesday said it was undertaking feasibility studies for a possible expansion of its yet-to-be-constructed Northern Gas Pipeline (NGP) which is due to deliver gas from Tennant Creek in the NT to Mount Isa in North Queensland. A 1100 kilometre extension from Mount Isa to southern Queensland is expected to cost another $1 billion.

Jemena executive general manager of corporate development Antoon Boey said the company was actively considering the pipeline expansion and was confident there would be enough gas contracts to underwrite the project, despite the Northern Territory's moratorium on on-shore gas exploration.

"We built the NGP to the size of market demand that we see at the moment. But the technical and feasibility we've done around the NGP means we can scale it up in the event of more demand for gas transportation," Mr Boey said in an interview with The Australian Financial Review.

"If extending it down into the south-east Queensland or increasing the size of it now, if that's a viable commercial option then we are looking at those. We believe we could transport up to 700 terajoules a day if there was sufficient demand."


The Northern Territory government on Wednesday granted Jemena the pipeline and construction licence for the Northern Gas Pipeline to Mount Isa which is expected to begin construction in July and be completed by the end of 2018.

The first stage of the pipeline is expected to carry 100 terajoules a day but a compression of gas (which effectively pushes more gas through the pipeline) and "looping" (which duplicates the pipeline in certain parts) could boost the capacity to 700 terajoules if the company decides to extend the pipeline to the populated south-east corner.

Jemena - which is owned by China's State Grid Corporation and Singapore Power - won the tender from the previous Coalition Northern Territory government in 2015 to build the gas pipeline to Queensland, but the current Labor administration has imposed a moratorium on "fracking" which has cast doubt on how much gas would be available out of the Top End.

Mr Boey said the moratorium had put dampener on gas contracts but he was confident the Northern Gas Pipeline - whose main client is Incitec Pivot - would be fully contracted by the time construction is complete by the end of next year.