RE: AFR19 Aug 2020 12:51
"NAIF funding, the NCCC, those sorts of things are all very much aligned in terms of what this particular infrastructure does, not just for the Northern Territory but really for the entire east coast gas market in terms of bringing cost-efficient gas to the markets that are really short on that," Central Petroleum chief executive Leon Devaney told The Australian Financial Review.
"It's a great piece of infrastructure, it makes a lot of sense."
Shares in Central, a junior oil and gas producer, were up 4.5 per cent at 9.3¢ in mid-afternoon trading.
A final go-ahead for construction is targeted for the second half of 2021, with gas to flow in the March quarter of 2024, Central advised.
However gas prices delivered through the pipeline are going to be in the $8-$10 a gigajoule range, not the $4-$6/GJ targeted by the NCCC's manufacturing taskforce and which manufacturers are calling for, Mr Devaney said.
"We’re going to be a very strong, cost-competitive source of gas and we expect to be able to compete aggressively with every producer on the east coast," Mr Devaney said.
"We are at a point where $4 is not going to be economically viable, you are just not going to get costs of production down there."
Central and Macquarie Mereenie, 50 per cent partners in the Palm Valley, Dingo and other gas fields near Alice Springs, would be the foundation customers for the pipeline, which would be built by Australian Gas Infrastructure Group, a pipeline business owned by Cheung Kong.
The proposed pipeline could deliver 124 terajoules a day of gas, or 45 petajoules a year, and could be expanded by adding compression.
Conventional gas fields operated by Central in the Amadeus Basin have about 200 petajoules of uncontracted reserves, which could be supplied through the pipeline, while other prospects lie nearby. The project does not depend on resources that require fracking, Mr Devaney said. The controversial process has become a campaign issue for the NT election on August 22.
The agreement between the three remains at the "memorandum of understanding stage", between Central, Macquarie Mereenie and AGIG.
Mr Devaney described the implications of the pipeline project as "huge" not only for the companies involved and for the NT, but for the east coast gas market, particularly as traditional gas supplies from the Bass Strait and Cooper Basin declined.
AGIG chief executive Ben Wilson said the company was "delighted" to partner with Central and Macquarie in the MOU and was focused on delivering gas for customers.
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