Santos backs southern route for Northern Territory gas pipeline link
Date November 15, 2015 - 5:08PM
Santos has spoken out to firmly back the southern route for the proposed gas pipeline to be announced on Tuesday that would link the Northern Territory into the eastern states' grid, saying it would be of more benefit for the nation than the alternative route to Queensland.
"From a nation-building perspective, we believe the logical route is via Moomba, which has the processing facilities and infrastructure network to access all markets in eastern Australia," said Brett Woods, vice-president eastern Australia for Santos, which could supply gas into the pipeline.
Mr Woods' statement comes as NT Chief Minister Adam Giles, a strong supporter of the North East Gas Interconnector (NEGI) project, has signalled he will announce on Tuesday the preferred bidder to build the line, after four contenders were short-listed earlier this year.
Two of the bidders, APA Group and unlisted Jemena, have proposed to build the line using the Queensland route, from Tennant Creek to Mt Isa, which they say will be cheaper and quicker, and will not rely on any public funding. That route would benefit the Gladstone LNG export ventures, and mining industry gas customers in Queensland, and is favoured by the Queensland government.
The other two bidders, DUET Group and a company owned by China National Petroleum Corporation, are proposing to use the southern route. That route, from Alice Springs to Moomba, is longer and through more-difficult terrain, making it more expensive, but would allow easier access to the state in most need of the gas, NSW, and could make use of existing gas-processing infrastructure at the Santos-operated Moomba site.
As owner of Moomba, Santos would also gain more financial benefit if the Alice Springs-Moomba route is selected. That route is preferred by the South Australian government.
According to Central Petroleum managing director Richard Cottee, a strong backer of the NEGI project, one of the southern bidders is also confident of being able to build the project without government funds, while the other is seeking about $300 million, potentially in the form of concessional loans from the federal government's $5 billion Northern Australia Infrastructure Fund.
The process to decide on the route and select the bidder is being completely controlled by the NT government, with the federal government remaining on the sidelines. The NT government would also make gas available from a contract held by territory-owned utility Power and Water for initial volumes for the pipeline.
Federal resources and energy minister Josh Frydenberg, who is also minister for Northern Australia, said last week he was leaving it to the NT to "make its own decision", while signalling that the project could win support from the infrastructure fund.
"If they wanted to make an application it would be considered on merit," he said.
Mr Woods underlined that whether the southern or the eastern route were chosen, competitive tariffs would be imperative.
"Regardless of the route, it will be crucial to have a competitive tariff scheme that enables the development of the NT's vast conventional and unconventional resources and allows for it to be supplied to customers at competitive prices," he said
From my reading of this either way Santos win - they get gas to Gladstone through the Northern Route or rental by going through Moomba and then onto Gladstone through their existing network anyway - win or win/win and Glng gets more gas - were is VH here we were last night discussing where some of the future gas for GLNG was going to come from....
Instos with their longer timeframes like this kind of stuff..
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