A Vi­tal Con­nec­tion

Je­mena's north­ern Gas Pipe­line is key to boost­ing east coast sup­ply and un­lock­ing the nt's gas po­ten­tial.

The Australian Energy Review - - FRONT PAGE - Cameron Drum­mond All im­ages: Je­mena.

“As we en­ter The next stage Of The pipe­line’s Devel­op­ment we ex­pect TO Draw On The skills AND TAL­ENT Of LO­CAL Com­mu­ni­ties, with more Than 600 Of The ngp’s Ap­prox­i­mately 900 Jobs ear-marked for LO­CALS.”

Once de­vel­oped, the North­ern Gas Pipe­line (NGP) could play a cru­cial role in driv­ing the ex­plo­ration and devel­op­ment of un­tapped gas re­sources in the North­ern Ter­ri­tory and re­lieve do­mes­tic short­ages on the east coast of Aus­tralia.

AF­TER nav­i­gat­ing land ac­cess is­sues dur­ing the first quar­ter of 2017, con­struc­tion of Je­mena’s $800 mil­lion North­ern Gas Pipe­line be­gan in earnest in July this year af­ter the com­pany suc­cess­fully nav­i­gated land ac­cess is­sues dur­ing the first quar­ter.

The 622km pipe­line through North­ern Aus­tralia will con­nect the NT’S vast gas fields to the east coast mar­ket, from the Amadeus pipe­line in the west to the Car­pen­taria pipe­line in the east.

Jointly owned by the State Grid Cor­po­ra­tion of China and Sin­ga­pore Power, en­ergy in­fra­struc­ture group Je­mena has a di­verse port­fo­lio of en­ergy and wa­ter trans­porta­tion as­sets across the east coast of Aus­tralia with more than $10.5 bil­lion worth of ma­jor util­ity in­fra­struc­ture.

It is Je­mena’s third ma­jor pipe­line in­fra­struc­ture project in Aus­tralia, fol­low­ing on from its 627km Queens­land Gas Pipe­line that de­liv­ers gas from the Su­rat/cooper Basin to Glad­stone and Rock­hamp­ton mar­kets; and the East­ern Gas Pipe­line which feeds sup­ply from Vic­to­ria’s Gipp­s­land Basin to Syd­ney, the ACT and re­gional NSW.

Je­mena man­ag­ing di­rec­tor Paul Adams said the project would pro­vide op­por­tu­ni­ties for fu­ture growth in the Ter­ri­tory.

“Build­ing [the pipe­line] 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 con­tracted gas vol­umes 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.

Mo­men­tary set­back

A dis­pute be­tween the Wakaya tra­di­tional land own­ers and the North­ern and Cen­tral Land Coun­cils pushed the project start date from April to July and forced a re-se­quenc­ing of the project’s con­struc­tion time­line.

Je­mena said mem­bers of the Wakaya Land Trust re­quested fur­ther con­sul­ta­tion be­fore grant­ing land ac­cess rights – even though the com­pany had re­ceived con­sent to be­gin con­struc­tion in April.

“Ear­lier this year Wakaya came back and said they needed a bit more time to un­der­stand the project and the po­ten­tial for em­ploy­ment op­por­tu­ni­ties,” Mr Spink said.

“It was im­por­tant for Je­mena that tra­di­tional own­ers fully un­der­stood what role they would be able to play in the con­struc­tion of the project.”

Lead pipe­line con­trac­tor Mccon­nell Dow­ell was sub­se­quently ter­mi­nated from the project as Je­mena re-eval­u­ated a new start date and project time­line.

How­ever, af­ter con­sid­er­a­tions and agree­ments made be­tween Wakaya, the Land Coun­cils and Je­mena, Mccon­nell Dow­ell was sub­se­quently reap­pointed to build a large pro­por­tion of the pipe­line.

“Our pre­vi­ous con­tract with Mccon­nell Dow­ell was premised on them build­ing the pipe­line in one hit this year,” Mr Spink said.

“When the Wakaya is­sue first arose we re-se­quenced our works and ul­ti­mately re­tendered a deal with Mccon­nell Dow­ell to build the first 481km of the pipe­line.

“The back end of the pipe­line to Mt Isa was then com­pet­i­tively ten­dered and won by Spieca­pag.”

Mr Adams wel­comed the dropped con­trac­tor back to the project af­ter con­sent for con­struc­tion was granted.

“With land ac­cess now agreed across much of the Ter­ri­tory, we now have the cer­tainty we need to ap­point Mccon­nell Dow­ell to con­struct this sec­tion of the NGP,” Mr Adams said.

“build­ing [The pipe­line] 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.”

“The in­dus­try is ready TO in­vest bil­lions in The nt when – AND if – The gov­ern­ment’s frack­ing mora­to­rium is Lifted.”

project start

Con­struc­tion of the NGP of­fi­cially com­menced mid-july, with more than 90 peo­ple at­tend­ing a sod-turn­ing cer­e­mony near Ten­nant Creek to mark the oc­ca­sion.

North­ern Ter­ri­tory chief min­is­ter Michael Gun­ner, NT Min­is­ter for Pri­mary In­dus­try and Re­sources Ken Vowles, mem­ber for Barkly Gerry Mccarthy, mem­ber for Mount Isa Rob­bie Kat­ter, and tra­di­tional own­ers and pas­toral­ists from across the pipe­line route were in at­ten­dance.

At the event, Mr Adams said the sup­port of the lo­cal com­mu­nity had been cru­cial in pro­gress­ing the project.

“We’ve worked closely with the com­mu­ni­ties – in­clud­ing tra­di­tional own­ers – sur­round­ing the pipe­line route through­out the plan­ning phase, hav­ing re­lied on their ex­per­tise and lo­cal knowl­edge and we thank them for their in­sight and sup­port,” Mr Adams said.

“As we en­ter the next stage of the pipe­line’s devel­op­ment we ex­pect to draw on the skills and tal­ent of lo­cal com­mu­ni­ties, with more than 600 of the NGP’S ap­prox­i­mately 900 jobs ear-marked for lo­cals.

“Pleas­ingly, 58 grad­u­ates of Je­mena’s Project Ready Train­ing Pro­gram – which pro­vides train­ing and devel­op­ment op­por­tu­ni­ties for lo­cal Abo­rig­i­nal peo­ple – have the op­por­tu­nity to take up full-time em­ploy­ment dur­ing con­struc­tion of the NGP.”

Mr Spink said he was proud of the en­thu­si­asm and com­mit­ment from per­son­nel trained un­der the pro­gram.

“These were un­skilled lo­cals look­ing for work, and the last­ing ben­e­fit that we at Je­mena are quite proud of is hav­ing been able to pro­vide them with the nec­es­sary qual­i­fi­ca­tions and em­ploy­ment in the con­struc­tion in­dus­try – some­thing they can po­ten­tially build a ca­reer out of.”

Mr Spink said the project was now mov­ing at a much quicker pace, with al­most all ap­provals nec­es­sary tied up and the first wave of con­struc­tion teams mo­bilised to site.

“Con­struc­tion of the Mt Isa com­pres­sor sta­tion has now be­gun, and our Phillip Creek com­pres­sor sta­tion out­side Ten­nant Creek is well un­der way now with earth­works largely com­pleted,” he said.

Mr Spink said con­trac­tors Mccon­nell Dow­ell and Spieca­pag had now started de­liv­er­ing on their re­spec­tive sec­tions of the project.

“Both con­trac­tors have made re­ally good en­gage­ment with re­cruit­ing lo­cal peo­ple and con­trac­tors, in line with com­mit­ments out­lined as part of our In­dus­try Par­tic­i­pa­tion pro­gram,” he said.

Fu­ture op­tions

With com­mer­cially ready gas re­sources in NT, the devel­op­ment of the NGP is be­ing in­creas­ingly seen as a so­lu­tion to do­mes­tic gas short­ages on Aus­tralia’s east coast.

Mr Adams said the pipe­line, once de­vel­oped, would play a “cru­cial role” in help­ing re­solve the east coast gas sup­ply cri­sis.

“This project is a boon for busi­nesses that rely on gas as ei­ther a feed­stock or fuel source by pro­vid­ing them with ac­cess to new gas at a cheaper price, par­tic­u­larly when com­pared to the costs associated with trans­port­ing gas over long dis­tances from the Moomba Gas Hub to QLD and NSW,” he said.

Cur­rently, the NT has a mora­to­rium in place to pre­vent devel­op­ment of shale gas projects, how­ever an in­quiry by the NT Gov­ern­ment into hy­draulic frac­tur­ing is un­der­way and due to come to an as­sess­ment to­wards the end the year.

An in­terim report re­leased on sched­ule in July was wel­comed by the Aus­tralian Pe­tro­leum Pro­duc­tion & Ex­plo­ration As­so­ci­a­tion (APPEA) as a sign that the in­quiry was on track to be com­pleted this year.

APPEA NT di­rec­tor Matthew Do­man said the in­quiry was clearly tak­ing a com­pre­hen­sive ap­proach and the in­dus­try would take time to study the report closely.

“We look for­ward to the panel con­clud­ing its work and en­abling the NT Gov­ern­ment to make a de­ci­sion on devel­op­ment of the Ter­ri­tory’s abun­dant gas re­sources.

“The in­dus­try is ready to in­vest bil­lions in the NT when – and if – the gov­ern­ment’s frack­ing mora­to­rium is lifted.”

“We be­lieve de­vel­op­ing the Ter­ri­tory’s nat­u­ral gas re­sources of­fers sig­nif­i­cant pub­lic ben­e­fits, in­clud­ing jobs and train­ing op­por­tu­ni­ties in re­gional com­mu­ni­ties, im­proved in­fra­struc­ture and ser­vices, and di­rect ben­e­fits to the tra­di­tional own­ers and land­hold­ers who host devel­op­ment on their land,” he said.

Mr Adams said lift­ing the mora­to­rium would un­lock the op­por­tu­nity for Je­mena to ex­pand and ex­tend the NGP.

“Je­mena has al­ready com­menced in­ves­tiga­tive work on ex­pand­ing the NGP and ex­tend­ing it south from Mt Isa to the Wal­lum­billa Gas Hub to fur­ther in­te­grate Ter­ri­tory gas into the east-coast gas grid, pro­vided ad­di­tional gas sup­plies are made avail­able in the Ter­ri­tory.

“Our mod­el­ling sug­gests that the pipe­line can be rel­a­tively eas­ily ex­panded and ex­tended to trans­port up to, or be­yond, 700 ter­a­joules (TJ) of gas per day.

“This far ex­ceeds gas used on an av­er­age day in the New South Wales and Queens­land mar­kets.”

First gas is ex­pected to flow through the NGP in late 2018.

“We have in­creas­ing in­ter­est at the mo­ment due to short­age fears on the east coast and ex­tend­ing the pipe­line and con­nect­ing the sig­nif­i­cant gas re­serves from NT basins would help ad­dress the is­sue, Mr Spink said.

“In the long term, the mora­to­rium needs to be lifted and the frack­ing in­dus­try sub­ject to ap­pro­pri­ate reg­u­la­tion from the Gov­ern­ment to drive the gas econ­omy in the Ter­ri­tory.”

Un­load­ing pipe at ten­nant Creek.

Ac­cess road con­struc­tion for the north­ern Gas Pipe­line.

Sod turn­ing at the NGP project. (left to right): Je­mena man­ag­ing di­rec­tor Paul Adams, nt chief min­is­ter michael Gun­ner, NGP project di­rec­tor Jonathan Spink.

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