CENTRAL Petroleum says it is encouraged by the support the Council of Australian Governments (COAG) has voiced for the rapid development of a natural gas pipeline that could cost upwards of $1 billion and would link the Top End with the and eastern gas markets.
The proposed gas pipeline was high on the agenda of national, state and territory leaders when they met in Canberra in October.
Northern Territory Chief Minister Adam Giles has been a vocal supporter of the pipeline link in recent months, openly backing its development at the South East Asia Australia Offshore & Onshore Conference back in August.
It seems Mr Giles’ support for a pipeline with a preferred route being from Alice Springs to Moomba has now gained unanimous national backing, with leaders at COAG indicating support for its development.
“Australia is getting behind this truly nation-building pipeline project which has the potential to secure the country’s energy supply for years to come,” Mr Giles said.
“The East Coast of Australia is facing a looming gas crisis and a Territory pipeline is the answer.”
According to Mr Giles, the Territory has the gas and there is demand for it, but at present there was no economically viable way to get the gas from Northern Australia to the eastern market.
“A pipeline is a win-win that would connect natural gas companies with potential buyers in the eastern states,” he said.
The NT has an estimated 30 trillion cubic feet of gas offshore and an estimated 240 Tcf of gas reserves onshore.
Mr Giles said it was clear that the leaders of the states and territories agreed that connecting the Northern Territory and East Coast gas markets was the next step towards developing a national gas grid which would contribute to the development of a more competitive domestic gas market.
“My fellow leaders expressed their support for the work the Territory is doing to establish a competitive process for the private sector to build and operate a pipeline,” he said.
“It’s exciting to see this project is really gaining momentum.”
APA Group is spearheading a $2 million feasibility study to assess the commercial viability of developing a pipeline link from the Territory to the East Coast.
APA has narrowed its options for the new pipeline to three prospective routes, with the northern route going from Tennant Creek to Mt Isa, while another prospective option could go through Moomba which could link up to the Cooper basin.
Indicative costs of building a new pipeline and upgrading infrastructure are between $900 million to $1.3 billion.
In the wake of the positive commentary on the pipeline out of COAG, Central Petroleum, which is a key oil and gas producer in the Top End having been the first company to secure a production licence in the NT in three decades, said the pipeline was the missing link that could provide real relief to gas shortages on the east coast.
“Joining the excess gas supply and enormous underexplored resources of the north to the eastern states that are severely short of gas is compelling on many levels,” he said.
“New sources of gas from multiple suppliers will contribute to the depth and liquidity of the domestic gas market and will inevitably lead to lower prices and more supply security for domestic gas users.
“Importantly, the hub will allow new gas projects to be developed by smaller operators requiring less capital and lower barriers to entry into the gas supply industry.”
Mr Cottee said the sooner the governments approved the pipeline route, the sooner it could be built, meaning gas consumers could get relief from the threat of rising gas prices.
“COAG’s endorsement of the NT Pipeline proposal to create a national domestic gas market will benefit natural gas consumers around Australia and it commendable that the Northern Territory Chief Minister Adam Giles has led this important micro-economic reform on behalf of the nation,” he said.