An Asian conglomerate has been announced as the preferred bidder to construct a gas pipeline connecting the Northern Territory to Queensland.
Jemena, which is jointly owned by the State Grid Corporation of China and Singapore Power, was announced by NT Chief Minister Adam Giles at a press conference today as the winner of the contract.
The pipeline project, known as the North East Gas Interconnector (NEGI), will link the Northern Territory’s Amadeus pipeline to Queensland’s Carpentaria pipeline between Tennant Creek and Mount Isa.
A simultaneous press conference was held in Mount Isa for the announcement.
The 622-kilometre pipeline had been identified as a key to firing up the NT’s onshore shale gas industry, which is expected to lead to an increase in hydraulic fracturing across the Territory.
“The pipeline itself is truly historic. It does cross borders. It is nation building,” Mr Giles said.
“It does help solve Australia’s looming energy crisis that is on its way.”
Jemena managing director Paul Adams said gas delivered by the pipeline would “drive growth, prosperity and future opportunities for the Territory well into the future”.
“Our vision for the NEGI is to drive commercial exploration and development of currently untapped gas reserves, unlocking the next phase of economic growth for the Territory and help build a stronger northern Australia,” Mr Adams said.
“The sustainable development of these immense natural resources will drive growth, prosperity and future opportunities for the Territory well into the future.”
Jemena beat three other proposals, two of which would have connected to the east coast through Alice Springs to Moomba in South Australia.
Mr Giles thanked unsuccessful bidder APA Group for its submission and said the choice came down to “who was prepared to take the risk for the reward… because we [NT Government] would not be putting any money into the construction of this pipeline”.
Jemena owns and runs energy and water transportation assets across the east coast of Australia, according to its website, with $9 billion worth of utility infrastructure.
On its website, the company said it would “commit to Northern Territory, western Queensland and Indigenous business participation and employment targets” during the project.
“We will go beyond historical norms in local opportunity facilitation and give preference to local content from the regions, then from the NT and western Queensland.”
The NEGI project is expected to deliver up to 900 direct jobs during its peak construction phase, tapering off to around 30 jobs once operational, though it is not clear what share of jobs will be based in Queensland.
The NT Government wants the pipeline to be operational by 2018.
Queensland Premier Annastacia Palaszczuk welcomed the announcement.
“This is a coup for Queensland for the jobs and opportunities it will create for local suppliers, as well as the potentially cheaper energy it will supply to the north-west resources projects,” Ms Palaszczuk said in a statement.
Queensland State Development Minister Anthony Lynham said export and domestic eastern seaboard gas demand was forecast to treble by 2020.
“More gas supplies can only help to contain energy prices that affect investment decisions,” he said.
The Mayor of Mount Isa, Tony McGrady, said the pipeline was “terrific news for our region”.
“It means jobs,” Mr McGrady said.
“We have also built a new relationship between Queensland and the Northern Territory which offers great hope for future joint projects.”