As the market continues to assess Jemena’s winning bid to construct the North East Gas Interconnector (NEGI) Pipeline, the impact the pipeline will have on upstream gas sector in Australia’s north is undeniable.
After a competitive tender process, Jemena was selected by the NT Government to construct and operate the AU$800 million pipeline, which will run for 622 km between the NT’s Tennant Creek and Mt Isa in Queensland.
While other proposals connecting the NT to the Moomba Hub in South Australia had been tipped as the most likely outcome, a gas sale agreement between the NT Government’s Power and Water Corporation (PWC) and Incitec Pivot’s manufacturing facilities near Mt Isa proved to be a deciding factor.
The deal will see PWC supply excess gas it is entitled to under contracts to Incitec Pivot for approximately ten years from the completion of the pipeline in 2018, approximately 13 per cent of the Government’s total contracted gas entitlement, while NT Government documents outlining the sale state it still allows PWC to sell gas to local businesses and easily accommodates existing and future demand by Territorians.
Jemena Managing Director Paul Adams said the scalable pipeline will provide the catalyst to fast-track development of the NT’s gas industry.
“Building the NEGI will drive commercial exploration and redevelopment of currently untapped gas reserves, unlocking the next phase of economic growth for the Territory and helping build a stronger Northern Australia,” Mr Adams said.
“As further reserves in the NT are proved up, we can expand our scalable pipeline to meet strong demand from east coast customers.”
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