Construction of Australia’s Northern Territory-Queensland Gas Pipeline Begins
Construction has begun on the A$800mn ($615mn) Australian Northern Gas Pipeline, which, when finished, will, for the first time, connect the country’s Northern Territory to its east coast gas market, the Northern Territory government said July 12.
“Today is a key milestone for Jemena’s pipeline – it’s an important day for a project that will deliver significant economic benefits to the Territory and Australia,” Northern Territory chief minister Michael Gunner said at the time.
The 622 kilometre pipeline is planned to run from Tennant Creek in the Territory to Mount Isa in Queensland, with first gas scheduled to flow late in 2018, Jemena, which has been selected to build, own and operate it, said.
It’ll link the Northern Territory to the Eastern Gas Pipeline Grid, which spans across the Australian states of Queensland, New South Wales, Victoria, South Australia and Tasmania.
That east coast gas market has been subject to much national debate this year as earlier in the year the Australian Energy Market Operator flagged potential gas shortages in the region by the end of the decade.
It later toned down its warnings, saying the market will be tight, but projections show “just sufficient” amounts of production to meet expected demand. Nevertheless, the Federal Government implemented LNG export restrictions in an effort to shore up local supply.
Jemena managing director Paul Adams said the pipeline has the potential to transport significant volumes to the region and ease the pressure on the LNG exporters.
“Our modelling suggests that the pipeline can be relatively easily expanded and extend to transport up to, or beyond, 700 TJs of gas per day. This far exceeds gas used on an average day in the New South Wales and Queensland markets,” Jemena managing director Paul Adams was quoted to say by The Australian.
“The pipeline will also benefit Australian households and businesses in the southern states, as it will free up gas currently flowing north to supply LNG plants in Queensland, making this gas available for use in New South Wales, Victoria, and South Australia,” he said.
The Northern Territory does currently have a moratorium on hydraulic fracturing.
Nevertheless, Origin Energy, which is a partner in the Australian Pacific LNG terminal in Queensland, in May said it would increase its share in the prospective onshore Beetaloo Joint Venture in the Northern Territory to 70% by acquiring Sasol Petroleum’s 35% interest.
“We look forward to progressing our understand of the play and maturing the contingent resources to reserves over time, subject to the outcome of the Northern Territory’s inquiry into hydraulic fracturing,” the company said at the time.
Following Origin’s announcement, RBC Capital Markets analyst, Ben Wilson, said he saw a “high likelihood” that the Territory government would overturn the moratorium.
Nathan Richardson