Galilee Energy, Jemena to Deliver Gas to Australia's East Coast

Galilee Energy and one of Australia’s biggest gas and power infrastructure businesses Jemena have agreed to cooperate in expediting the latter’s new pipeline to deliver natural gas to the east coast market, which is facing significant shortages.

Galilee said October 17 that the two parties “will fast-track plans to deliver a large new source of gas from Galilee’s Glenaras gas project in the Galilee Basin in central Queensland to the east coast domestic market.”

It said also that the agreement means that Jemena will now begin engaging with local communities, conducting field surveys and completing pipeline design concept works. At the same time, Galilee will continue its appraisal activities at Glenaras to certify that the proven gas resource is large enough to underwrite the pipeline’s construction.

“Galilee Energy has one of the largest uncontracted contingent gas resources on the east coast. The company’s upcoming lateral programme has the potential to unlock this resource into a significant reserve position. This partnership is all about working together to get this critical gas supply option to the domestic market as quickly as possible,” Galilee’s managing director Peter Lansom said.

Jemena’s executive general manager of corporate development Antoon Boey said that to overcome the gas supply concerns currently gripping the east coast large new sources of gas need to be produced and delivered to the market as quickly as possible. He added that both Jemena and Galilee will be ready to proceed to front end engineering and design (Feed) on both pipeline and field development in 2019.

Construction began in July this year on the Northern Gas Pipeline, a 622km pipeline from Tennant Creek in the Northern Territory to Mount Isa in Queensland. The first gas is expected to flow through the pipeline in late 2018, Galilee said.

Australia Energy Market Operator (AEMO) has said that the gas supply situation remains tight in the eastern and south-eastern Australian markets. It has projected shortfall risk for 2018 between 54 PJs and 107 PJs, and in 2019 between 48 PJs and 102 PJs. These projections are significantly higher than what AEMO predicted in March this year. The total projected demand for domestic gas is expected to be about 642 PJs in 2018, and 598 PJs in 2019. 

Shardul Sharma