Released today = I notice there are discussions about the concern of centrals balance sheet and firmer gas sales contracts, I agree with comments made. Mr Central, you better start improving your market capital thus, the share price. Start to turn this company aroud Mr central
WOOD Mackenzie still doubts the $800 million Northern Gas Pipeline will deliver a positive return although a Jemena senior executive has told Energy News shale gas reserves aren’t needed to achieve it.
“There is enough conventional gas already available in the Northern Territory without further exploration to be able to fill the pipe and take gas to market,” Jemena executive general manager – strategy, regulation and markets Shaun Reardon said ahead of the Australian Pipelines and Gas Association conference in Perth, which he addressed yesterday.
Column 1 0 1 2 Map of the Northern Gas Pipeline.
“We’ve signed onto tariff arrangements that have been competitively negotiated with the NT government that Jemena is comfortable with, but we do see that the life of the pipeline is well beyond 10 years.
“We expect the current regime that we’re operating under to continue over the life of the pipeline to ensure that as an investor we’re able to recover the investment we’ve made which needs to be over a period longer than 10 years.”
The company announced last month that the hydraulic fracturing ban implemented by the Labor government in the NT would not impact on construction of the 622km NGP, as it will use “current and existing” onshore and offshore NT gas reserves.
However, Wood Mackenzie is less optimistic.
“We struggle to see how the Northern Gas Pipeline will deliver a positive return based on the limited current available gas supply options,” Wood Mackenzie’s lead analyst for Australasia Saul Kavonic told Energy News.
“Significant further exploration and appraisal success would be needed. While unconventional prospects could be potentially large, they are at very early stages.
“To proceed at a large commercial scale was always a long-term prospect, if they were to proceed at all, and the recent moratorium on hydraulic fracturing is only going to push that back further.
“Even the current conventional resources in place at Central's fields pose a challenge for commercialisation through the pipeline, in part due to Central's limited balance sheet, which is why we suspect we haven’t seen further firm contracts signed for that gas recently.
“In pursuing the NGP under these conditions, Jemena are indeed taking on a significantly higher risk profile than is typical for a pipeline project.”
Jemena said its team was continuing with its planning phase as it moves “quickly” towards construction, with registrations flowing into the Chinese-backed concern’s new NGP Jobs and Training Portal, which allows people to register their interest in opportunities on the project, as well as sign up to receive new job opportunities.
Project engineer James McMahon was in Tennant Creek in the second week of September inspecting the proposed Phillip Creek Compressor Station site, on which Jemena expects construction to start early next year once all approvals are in place.
Throughput and tariff concerns had Wood Mackenzie wondering whether the NGP would reach final investment decision.
In its report, Risks remain for the NEGI, Wood Mackenzie pointed to concerns around logistics and remoteness constraints, plus the fact that while there are proved reserves of conventional gas, to date there had been no commercial flows from unconventional reserves.
Wood Mackenzie modelled that from Blacktip and Central Petroleum’s Mereenie, Dingo and Palm Valley assets, there are only enough reserves to keep the proposed pipeline full for around 10 years.
Central has Dingo and Palm Valley on its own, and shares Mereenie with Santos.
“The tariff you need to keep the [then-called North East Gas Interconnector] full for 10 years is twice the tariff you would need if it was, say, a 25-year life, which is more typical for a pipeline,” Kavonic told Energy News a year ago.
However, Reardon told Energy News last week that Jemena was are confident there would be gas in the NT for “more than 10 years, from a range of sources”, but would not be specific.
“We do see a lot of opportunity in the NT,” he said.
http://www.energynewsbulletin.net/s...e=Pipelines§ionsource=f2874525&aspdsc=yes
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