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Jemena to Build North East Gas Interconnector

Posted on 7 December 2015

Source: Jemena

Jemena is proud to announce it has been selected by the Northern Territory Government to build and operate the North East Gas Interconnector (NEGI), connecting the Territory's vast gas fields to the east coast gas market.

After a competitive tender process, Jemena was chosen for proposing the most economical, efficient pipeline route and its proven track record of developing and operating major Australian energy supply assets.

The 623km pipeline will link Tennant Creek in the Territory to Mt Isa in Queensland, and cost around $800 million to construct.
Jemena Managing Director Paul Adams said the pipeline would fast-track development of the NT's gas industry, with gas expected to flow to east coast markets from 2018.

"Building the NEGI will drive commercial exploration and development 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.

"The pipeline is cost-effective and relatively quick to build, so it will support a strong gas industry for the Territory by getting gas to market at a competitive price, accelerating development of NT gas fields and helping create jobs and opportunities in the gas industry.

"As further reserves in the NT are proved up, we can expand our scalable pipeline to meet strong demand from east coast customers."

Mr Adams said routing the pipeline to Mt Isa was the most efficient way to get gas to the east coast, as it reduced potential construction risks and required lower volumes of gas to be contracted to be viable.

"Going south just wouldn't have provided the same catalyst to fast track development of the NT's gas fields," he said.

"The much longer route south via Moomba would have been far more expensive, is technically and environmentally complex to build and would require much larger volumes of gas to be contracted to support the pipeline gas which is not yet commercially proven.

"As soon as sufficient gas is proven in the NT, Jemena will seek to build a further link connecting Mt Isa to the Wallumbilla hub in Queensland. This will vastly improve the reliability of the gas transmission network by reducing sole reliance on Moomba as the hub for supplies. It will also introduce some much-needed competition into the east coast market, while accelerating the growth of the NT gas sector.

"By linking the Territory's vast resources into the east coast network, NEGI will be the foundation of a more robust, competitive Australian gas market."

Mr Adams said Jemena had been working closely with communities and businesses along the proposed route from the start of the bidding process, to harness as much local and Indigenous participation as possible in the delivery and ongoing management of the pipeline.

During the planning, construction, and commissioning phases, Jemena will create up to 600 jobs for locals and offer up to 100 contracts for local businesses, worth around $112 million. It also expects to staff ongoing operations and maintenance teams at both Tennant Creek and Mount Isa from local workforces.

To ensure remote communities benefit as much as possible from the NEGI project in the long-term, Jemena is also investing in training programs, Indigenous apprenticeships and a new Indigenous social enterprise in Tennant Creek to provide support services for construction and road maintenance projects in the area.

Jemena has a strong track record of developing and operating major Australian energy supply assets.

It owns and operates a diverse portfolio of energy transportation infrastructure across eastern and northern Australia. These include the Queensland Gas Pipeline, which delivers gas to the industrial hubs of Gladstone & Rockhampton, the Eastern Gas Pipeline, which provides more than half of the gas used in NSW from Bass Strait, and the NSW gas distribution network, supplying more than 1.3 million customers.

Construction of the NEGI is expected to be completed by 2018. Once completed, it will be known as the Northern Gas Pipeline (NGP).