QGC says that the proposed Wallumbilla pipeline would give the advantage of paying a single carriage price tariff to access Gladstone, Moomba, Adelaide, and Brisbane markets, and two carriage price tariffs to access Mount Isa and Sydney markets.
Managing director, Richard Cottee, said that the energy supplier’s proposed pipeline will create gas transport and storage infrastructure, and represents another pathway for QGC to enter new markets. “QGC’s proposed gas transmission pipeline from our acreage near the town of Columboola to Wallumbilla takes advantage of our strategic geographic location on the national electricity grid and adds another dimension to our business,” Mr Cottee explained. “The Wallumbilla pipeline makes commercial and strategic sense. It represents a key plank in the QGC business model of maximizing revenues by tapping gas and electricity spot markets to give QGC’s optionality to supply during demand peaks”. He said that the aim of accessing the Wallumbilla pipeline is to position QGC to take advantage of the spot gas market in a similar way to the manner in which the Henry Hub dominates the US spot market.
Mr Cottee added that the proposed Wallumbilla pipeline would also complement Epic Energy’s proposed Ballera to Moomba gas pipeline interconnect, which was announced on 24 August 2006.
The licence application proposal is to build the pipeline alongside the Warrego Highway and railway line, 90% of which is public land. Although the Government approval process is expected to take several months, the company has already commenced stakeholder consultation and is progressing environmental data for approvals. Pending approval, QGC expects construction to take 12 months with March, 2008, targeted for completion.