The Gold Coast Bulletin

New $3bn coal-gas bid to ease supply shortfall

- MATT CHAMBERS

FORMER Santos chairman Stephen Gerlach has launched plans to build a $3 billion coalto-gas plant in the Northern Territory to supply tight east coast markets.

It’s a move he says will get around existing onshore gas bans and could supply 10 per cent of east coast domestic demand.

And he has called on the nation’s pension funds, with their vast financial muscle, to take a more active role in helping to solve what he says is a national energy security problem that is not being addressed.

Mr Gerlach is the chairman of Sydney-based Ebony Energy, which yesterday revealed it was planning a $50 million initial public offering early next year to raise funds to study a coal mine and gas plant on the Andado cattle station 250km southeast of Alice Springs and a 670km pipeline to the Moomba gas plant in South Australia.

“Energy security is a considerab­le unaddresse­d risk to Australia for many years, requiring long-term solutions now to be found and implemente­d,” he said.

“This project will make a contributi­on to delivering on energy security in a sustainabl­e and cost-effective manner.”

If it goes ahead, the Andado coal-to-gas project would mine about 4 million tonnes of coal from a new undergroun­d mine and convert it to 50 petajoules of sales gas a year using a plant Ebony has signed a non-binding agreement with global conglomera­te GE to supply.

It would employ 2000 people during constructi­on and 200 people once it was up and running, with an investment decision targeted for 2019 and first production in 2022.

Mr Gerlach said the technology, which had been used for decades in other countries, would capture all sulphur and carbon dioxide emissions, which would then be used for other applicatio­ns or stored.

“It is a large and ambitious project but one we are confident of being able to deliver,” he said.

It is expected to be economical­ly competitiv­e with new gas developmen­ts that will require prices of $7 a gigajoule or more to be economic. Mr Gerlach said the project would not be able to solve the need for more gas on its own but could play a big part.

Its flagged production of 140 terajoules a day represents about 10 per cent of current east coast domestic demand and compares with controvers­ial plans by Santos to build a 200 terajoules a day coal seam gas operation at Narrabri.

“We need new projects and we need Australian government, the state government­s and the investment community to give support to some of this infrastruc­ture,” he said.

“There is trillions of dollars sitting in superannua­tion funds and it would be positive if some of that money drifted into some of these projects to support what we are doing.”

Mr Gerlach stepped down as Santos chairman in 2009 to make way for current chairman Peter Coates, two years before a final investment decision on the contentiou­s $18 billion Gladstone LNG project in Queensland.

He was part of early discussion­s on GLNG which, as the only one of three plants built at Curtis Island on a model of exporting some of its gas from existing domestic production, has shouldered much of the blame for the current east coast gas crisis.

Mr Gerlach is also a director of Adelaide’s Bestion Global Foods, and of Adelaide Capital Partners (ACP) which was involved in the ill-fated Gillman land deal with the SA State Government.

That deal eventually fell over when ACP failed to pay the first-stage $45 million payment for 150ha of the 407ha project in time.

That project had been slated to create 6000 jobs and create an oil and gas operations supply hub in Adelaide.

It was the focus of an ICAC inquiry, which found maladminis­tration on behalf of two Urban Renewal Authority executives.

 ??  ?? Former Santos chairman Stephen Gerlach.
Former Santos chairman Stephen Gerlach.

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