The article below appeared in the AFR on Thursday 12th...

The article below appeared in the AFR on Thursday 12th September.

Talk about a company having demand for its product, Rio, Gladstone, etc...

Normally, I don't like to type like a secretary but given the quality of posts on the AJQ thread, I wanted to share the article, it paints the big picture very well and helps demonstrate what a great position AJQ will be in provided we don't drill a duster:

START OF ARTICLE:

"The Northern Territory Chief Minister Adam Giles has increased the volume of gas on offer for Rio Tinto's Gove alumina refinery even though the ability to supply the gas has yet to be confirmed.

My Giles told the AFR that the volume of gas on offer to RIO to help keep the loss making Gove plant open has been increased to 175 petajoules from 130 petajoules.

He said that the figure of 195 petajoules that was part of the government's July offer for Rio included heavy fuel oil as well as gas, so the latest offer was an improvement rather than a reduction as the figures appeared on the surface.

We want the refinery to stay open and we are doing everything that we can to make sure that happens Mr Giles said.

The Chief Minister said he will meet with Rio next week to discuss the mining majors response to the offer, and wether it will be enough for the Gove refinery, the biggest private employer in Arnhem Land to remain in operation.

The plant runs on expensive heavy fuel oil but Rio wants to switch its energy supply to gas to reduce costs. Rio's pacific aluminium division owns the Gove plant would not comment on the specifics of gas supplies. Pacific Aluminium is continuing to consider gas supply options a spokesman said.

Mr Giles said the additional gas on offer came from the Eni's Blacktip field in the Bonaparte Basin. However Eni is understood to still be considering if it can guarantee the extra supplies. Some gas has also been released that had been dedicated to the territory's utility Power and Water Corporation.

Santos would also supply gas from the Mereenie fields in central Australia, while ConocoPhillips would be relied on for back-up emergency supplies. The gas would be transported to Gove through a pipeline likely to be built by the APA Group.

Eni, the NY government, Santoa, APA, Conoco and (likely federal industry minister) Ian Macfarlane have all worked extremely hard to put a good offer on the table Mr Giles said.

While several companies are exploring for shale gas onshore in the NT, work is still at an early stage no shale gas is included in the offer.

Rio's decision last month to drop plans for a spin-off of Pacific Alumina sparked speculation that the miner was likely to close Gove rather than hunt for ways to keep the plant open. But Mr Giles said that he had no indication from Rio that was the case.

The NT's original offer of gas for Cove under previous chief minister Terry Mills was 300 petajoules of gas, mostly released from the Power and Water contract. But Mr Giles decided that posed too big a risk for the NT economy, exposing it to an additional potential cost of about $3.2 billion if alternative supplies could not be found at a similar price.

Speaking earlier at a conference in Darwin, Mr Giles pointed to opportunities to link the NT into the national gas grid, and he said he was discussing a pipeline between Alice Springs and Moomba with South Australian premier Jay Weatherill.

Mr Giles reiterated his opposition to a gas reservation systesm in the NT but said he wanted to ensure offshore resources are developed and that a "use it or lose it" policy for offshore leases was finalised".

END OF ARTICLE.