Billion-dollar pipeline to put Territory on the gas map

A gas pipeline connecting the NT to the east coast grid is now “almost certain” to be built, Chief Minister Adam Giles has declared.

A gas pipeline connecting the Northern Territory to the east coast grid is now “almost certain” to be built, opening up massive potential development opportunities and expected cheaper domestic prices, Chief Minister Adam Giles has declared.

APA Group, DDG Operations, Merlin Energy Australia and SGSP Assets have been ­chosen from a shortlist of nine candidates to submit final proposals to complete the project.

The billion-dollar North East Gas Interconnector would link more than 2000km of existing pipeline in the Territory to more than 7000km on the east coast, most likely via a route between either Alice Springs and Moomba or Tennant Creek and Mount Isa.

Mr Giles said the submissions, whittled down by experts during the past month, had given the government confidence that the pipeline could go ahead without or with only minimal federal support. He did not say whether the Territory would be required to kick in extra funds or release gas from public contracts to make the pipeline viable.

“The quality of the submissions through the government’s competitive process for the pipeline’s construction has been so high that we now feel it is inevitable that this vital pipeline will be built,” he said.

“The submissions give us confidence that this project is seen by the private sector as being commercially viable, and that the focus of government support will be around facilitating approval processes. Put plainly, the numbers seem to be stacking up.”

Mr Giles said the pipeline would generate investment in regional infrastructure and jobs in the bush. He said the project could go ahead, at least initially, without widespread fracking of onshore shale gas resources.

“The first tranches of gas for this pipeline are expected to come from existing offshore and onshore fields giving us the time to get the regulatory environment right for an expanded industry into the future,” he said.

A controversial report commissioned by the Giles government refuted calls for a moratorium on fracking, but found the existing regulatory regime was not up to scratch.

The government has promised to “go slow” with development, in the face of growing concern among pastoralists and fears of a NSW-style public backlash.

The Territory could have as much as 200 trillion cubic feet of gas in onshore basins or enough to power all of Australia for 200 years, according to estimates relied upon by the government in justifying the pipeline project. A further 30 trillion cubic feet is believed to exist offshore. East coast gas demand is predicted to as much as triple as LNG exports increase.

“The current local (Territory) industry can’t support gas exploration and development on its own without the market confidence this pipeline provides,” Mr Giles said.

“This pipeline will connect them with the volume of customers they need to fund the scale of exploration the Territory needs to fuel new industries into the future.”

A preferred bidder is likely to be chosen by the end of the year. That company would then be expected to clear all environmental and regulatory hurdles some time in 2017, with the pipeline expected to go into operation mid-2018.

The NSW and federal governments have previously expressed support for the NEGI project.