THE $800 million Northern Gas Pipeline project has reached another key milestone with construction of the pipeline formally commencing.

Attending a sod-turning ceremony near Tennant Creek to mark the occasion, Paul Adams, managing director of the pipeline’s developer Jemena, said the Northern Gas Pipeline will play a crucial role in helping to 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 Queensland and New South Wales,” said Mr Adams.

“Jemena has already commenced investigative work on expanding the Northern Gas Pipeline 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 TJs of gas per day. This far exceeds gas used on an average day in the New South Wales and Queensland markets.

“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.”

Mr Adams said the support of the local community has been crucial since Jemena was awarded the contract to build and operate the Northern Gas Pipeline by the Northern Territory Government in late 2015.

“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 as we completed key regulatory and other approval processes,” said Mr Adams.

“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 Northern Gas Pipeline’s approximately 900 jobs ear-marked for members of the local community.

“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 Northern Gas Pipeline.”

More than 80 people attended the sod-turning ceremony near Tennant Creek including Northern Territory Chief Minister, the Hon. Michael Gunner, and former New South Wales Premier, and Chairman of Jemena’s Northern Gas Pipeline company, the Hon. Nick Greiner AC.

Mr Greiner commended the Northern Territory and Queensland Governments for their  ongoing support of the Northern Gas Pipeline project.

“Northern Territory and Queensland Governments both past and present have been fantastic advocates for the Northern Gas Pipeline and are to be commended for their vision and ambition in supporting the development of this critical project. We’re very pleased with the positive relationship we have developed with both jurisdictions and look forward to building on this as we move through the construction and into the operational phase of the project,” said Mr Greiner.

The Northern Gas Pipeline will span 622km from near Tennant Creek, in the Northern Territory, to Mt Isa in Queensland. Approximately half of the Territory section of pipeline and most of the Queensland section of pipeline will be constructed this year with the remaining pipeline to be constructed in 2018.

Jemena has partnered with McConnell Dowell to construct a 481km section of the pipeline across the Territory and into part of Queensland. The remaining 141kms of pipeline in Queensland will be constructed by Spiecapag Australia.

First gas on the Northern Gas Pipeline is expected to flow in late 2018.