NEGI is a long way off, page-2

Incitec Pivot Limited (ASX:IPL) today announced the execution of a long term gas supply agreement for its Phosphate Hill manufacturing plant in North West Queensland. The agreement with Power and Water Corporation (PWC), a Northern Territory Government owned corporation, has been entered into as part of the North East Gas Interconnector (NEGI) pipeline project. The NEGI pipeline, which is a project of national significance, has been granted Major Project status by the Northern Territory Government, has been declared a coordinated project by the Queensland Government and has the support of the Council of Australian Governments.
Subject to the satisfaction of certain conditions precedent, the last of which must be satisfied before the end of 2016, Incitec Pivot will purchase gas to support PWC’s foundation gas transportation contract for the pipeline to be constructed from Tennant Creek to Mount Isa. Jemena Northern Gas Pipeline Pty Ltd has been appointed to build the pipeline which will connect the existing Northern Territory gas pipeline network with the Eastern Australian gas pipeline network.
The new gas supply agreement will provide conventional gas to Incitec Pivot’s Phosphate Hill plant for approximately ten years, from completion of construction of the pipeline through to 30 June 2028. It restores competitively priced gas to Phosphate Hill and is expected to result in gas costs decreasing by approximately $55 million per year as against the current cost.
The gas to be supplied under the agreement will be procured by PWC from its existing upstream gas supply agreements sourced from the Blacktip field in the Bonaparte Gulf off the Northern Territory coast and the Dingo field in the Amadeus Basin. The gas to be made available by PWC is excess to the requirements of its customers in the Northern Territory and supply is subject to those requirements.
Incitec Pivot is continuing to work through options for supply of gas to the plant from the end of the current gas agreement (on 31 December 2016) through to commencement of supply from PWC.
Incitec Pivot’s Managing Director & CEO James Fazzino said: “This project demonstrates that people with vision in Australia can achieve outstanding results. New gas from the Northern Territory will create new jobs in Northern Australia. I congratulate the Northern Territory Chief Minister Adam Giles for his leadership on this project of national significance.”