Mr McCormack began his address by reflecting on the forward-thinking decision of the 1984 Northern Territory Government to pursue the gas option for electricity generation as opposed to the coal-fired option, which led to the construction of Australia’s largest pipeline at the time – the Amadeus Pipeline. This foresight, Mr McCormack said, has placed the Northern Territory in a good position to undertake some pipeline projects that will ensure it meets its gas supply requirements into the future.
Mr McCormack then turned his attention to APA’s vision for expansion in the Northern Territory and outlined the importance of a connection to the east coast grid in terms of meeting supply demands post 2020, particularly if the Gove pipeline connection goes ahead.
“In the medium term, with continued development of the gas industry in the Northern Territory, it will make sense for APA to invest in connecting our east coast gas grid with the Northern Territory – thereby providing the same benefits to our customers in the Territory that we are now offering on the whole of the east coast of Australia, and opening up new markets for producers in the Territory,” said Mr McCormack.
“This has been discussed for some time, and I am pleased that there has been strong interest in creating such a link. APA’s engineering and transmission teams are already looking at how this link can be created cost effectively. At this stage we have a clear idea of an optimal route of some 700 km between our Carpentaria and Amadeus pipelines.”
Mr McCormack highlighted that this vision for an east coast connection was front of mind at the recent signing of a Heads of Agreement between APA and Armour Energy.
“Thanks to the existence of our network, Armour, who is focused on gas exploration activities here in the Territory, is able to proceed with exploration of the McArthur, South Nicholson and Georgina Basins knowing that the infrastructure required for gas transportation will be available – through APA – on commercially appropriate terms should Armour be in a position to proceed with accessing various markets in Mt Isa, Sydney and Queensland,” said Mr McCormack.
“There are a number of phases proposed for the arrangements with Armour Gas, with the final phase involving the interconnection of the Queensland and Northern Territory gas markets and pipelines, expanding APA’s existing pipelines where required and building new pipelines to deliver gas from Armour’s Queensland and Northern Territory reserves.”
In wrapping up his address, Mr McCormack made reference to the policy and government action recommendations made by APIA in its report, titled “˜Securing Australia’s Energy Future’ in order to respond to the surge in demand for gas that will take place in the coming years due to the expansion of LNG export facilities in western and northern Australia, as well as the development of new export LNG facilities in the east.
“There’s no question that we are operating in an environment of upward pressure on gas prices, leading to debate around the impact of higher prices on domestic gas demand levels,” said Mr McCormack.
“At APA, we expect to see a supply-side response to this. Potential sources of supply are abundant, and higher prices provide an economic incentive to bring more gas production into the system.”
The dinner was held at the Hilton Darwin and was proudly sponsored by APA Group and Fyfe.