In November 2015 Jemena was selected by the Northern Territory Government to build and operate the Northern Gas Pipeline (NGP). The 622km pipeline will link Tennant Creek in the Northern Territory to Mount Isa in Queensland, driving commercial exploration and development of currently untapped gas reserves. We spoke with Jemena’s Antoon Boey in the lead up to the 22nd SEAAOC conference.
Antoon, congratulations to Jemena on winning the contract. This is an important project for the Northern Territory, with broader implications for Australia’s domestic gas market.
Once the project is fully operational, what are the major benefits and opportunities that you believe the NGP will open up for the Northern Territory’s gas industry?
AB: Providing a link for Northern Territory gas to flow directly to a key trading location could significantly change the dynamics of the east coast gas market. Competitive prices and more choice will make the NT a substantial new supplier for east coast buyers, accelerating the development and viability of the NT gas sector, which in turn will benefit all gas consumers.
By building and operating this pipeline, we look forward to contributing to the Territory’s economic growth and prosperity for many years to come. Once sufficient gas is proved up and available to transport, Jemena’s long-term vision is to build a further connection from Mount Isa to the Wallumbilla hub on Queensland’s east coast.
It is nine months since Jemena was selected to deliver the NGP. Could you tell us a bit about the major milestones that Jemena have achieved to date and the next stages to advance the project further?
AB: The Northern Gas Pipeline is progressing to schedule.
Our Approvals and Stakeholder Management team has carried out extensive community and business consultation, travelling along the proposed pipeline route and visiting surrounding areas.
The first major milestone took place in May, with the first batch of 3,500 tonnes of steel cast, with pipe manufacture and coating commencing shortly after. Four Solar Turbines Taurus 60 compressor packages were ordered – two will be installed at Mount Isa in Queensland and two at Phillip Creek in the Northern Territory along with an additional two smaller units.
Detailed design for both pipeline and compression facilities has commenced, and a number of long lead procurement packages are out for tender. Construction of the project is scheduled to begin in early 2017, with completion of both the pipeline and facilities in 2018.
What have been the main challenges to date that the business has had to overcome to ensure the project is moving forward as planned?
AB: We’ve always believed in the NGP and the strength of our bid, so we’re well progressed on securing all necessary approvals and permits. We’ve established strong and respectful relationships with Traditional Owners, landholders and local communities, and we expect construction to proceed without difficulty.
In April, we made the decision to order a 12 inch pipeline, to ensure we complete our project on time with first gas to flow in 2018. At the time of ordering, there wasn’t enough demand for gas transportation services to warrant anything bigger than 12 inches. However, capacity on the pipeline can be relatively quickly expanded as demand for transportation services increases.
The project is expected to bring opportunities for local businesses during the design, construction and commissioning phases and also during ongoing maintenance and operation. Can you tell us more about the opportunities that you foresee for local businesses to align themselves with the NGP in the next 12-18 months?
AB: We expect that during planning, construction and commissioning, the NGP project will create around 900 jobs. We are focusing on sourcing labour from close to the project area – in the Tennant Creek and Barkley areas of NT, and the Mount Isa region in western Queensland.
Jemena has implemented a business investment fund to assist small and medium enterprises in the NT and Mount Isa areas. It is designed to build local capability and capacity, and to assist those businesses to participate in the project.
We are launching a recruitment website in September that will feature jobs and training opportunities available.
You will be speaking about the project at the 22nd SEAAOC this September, what are the conversations that you are most looking forward to having with your peers at the event?
AB: I am most looking forward to discussions with my peers from industry, governments, regulators and gas customers, regarding how we can all work together towards the goal of developing a robust and sustainable gas industry, not just in the Northern Territory, but across the nation.
Energy projects in Australia are experiencing much tougher investment hurdles in recent times, whether it be the current softness in oil prices, or increasing labour and other costs in the sector.
As a sector, by which I mean the energy exploration, development and delivery sector, we can’t let these short term constraints drive overly conservative investment decisions. An excess of caution will mean that we are not ready to take advantage of better prices once economic conditions improve.
To capitalise on the opportunity for economic and social advancement, which is there because of Australia’s vast volumes of gas, all parts of the supply chain have to work together to stay cost competitive. Governments and regulators also have a critical role to play in creating the right environment to attract the necessary investment.
You can hear more from Antoon at the 22nd SEAAOC conference, taking place on the 13th and 14th September at Darwin Convention Centre.