Pipeline giant Jemena has revealed a $6bn plan to open up the Northern Territory’s vast Beetaloo gas reserves for east coast users and Darwin LNG exports, as a major producers group warned the industry faced an attack from professional activists shifting their focus to gas from coal mining.
Jemena, owned by China State Grid and Singapore Power, has proposed a staged investment scheme that could eventually boost the capacity of its Northern Gas Pipeline ten-fold.
Jemena will consider partnering with infrastructure players and superannuation firms to fund the projects along with potential assistance from the Morrison government’s Northern Australia Infrastructure Facility.
It’s aiming to fill the pipeline with production from the prospective Beetaloo, a huge gas basin prioritised by the Morrison government for fast development and widely seen as the next big source of gas for Australia’s east coast.
A partnership deal has been signed between Jemena and Tamboran Resources, a junior partner with Santos in Beetaloo and McArthur acreage 600km south of Darwin, with Jemena hoping to open talks with other major producers including Origin Energy ahead of potential production from Beetaloo in 2025.
The Jemena scheme would initially focus on a $1bn plan to double capacity of the Northern Gas Pipeline — which links Tennant Creek in the NT to Queensland’s Mount Isa — by 2025, and a separate $1bn investment to connect the inland Galilee gas reserves to the Wallumbilla hub, which has also been name-checked by the government as a priority area for development.
The biggest investment of about $3bn would loop and expand the Northern Gas Pipeline to the Galilee Pipeline with capacity of up to 1000 terajoules a day. The final part of the jigsaw would see $1bn invested in connecting the Beetaloo to Darwin, where both the Darwin and Ichthys LNG export plants already operate.
“This is an important step towards delivering on the Commonwealth government’s plans for the Beetaloo as part of a gas-led recovery from the COVID-19 pandemic,” Jemena managing director Frank Tudor said.
While the Morrison government has swung behind the gas sector with a raft of initiatives to boost its role in the economy, the major producers group Appea has warned the industry needs to be on the front foot against activist investors.
“With a gas-fired recovery we have a pivotal moment to support Australia back to growth. However, we are challenged by a vocal minority that would prevent responsible development of Australia’s reserves, preferring instead to turn the community and political decision makers against the industry and its role,” Andrew McConville, chief executive of the Australian Petroleum Production and Exploration Association which represents the energy industry, will tell the Seaaoc conference in Darwin on Wednesday.
“Professional activists have set their sights on the gas sector, not unlike the coal industry before us. They seek to delegitimise our members’ activities and divert investment away from the sector.”
Activist campaigns “are yet to make a major impact on community sentiment towards oil and gas. But the risk for our members is that the noise will get louder and government and investors may increasingly take their cues from these groups,” Mr McConville will say.
Meanwhile, Santos cheered the jump in oil prices on Monday along with the potential vaccine breakthrough, but cautioned new investment in the energy sector would still hinge on a sustained lift in crude coupled with government stimulus to ensure the industry can meet new demand.
Shares in the Australian producer jumped 12 per cent during Tuesday trading after oil prices surged 8 per cent overnight Monday, their biggest daily gain in five months.
“Certainly the positive vaccine news is welcome as are higher oil prices overnight,” Santos chief executive Kevin Gallagher said.
“But as always I’m focused on the things we can control – reducing our cost of supply and sticking to our disciplined, low cost operating model so that Santos is resilient throughout the commodity price cycle.”
The industry‘s other big names also benefited with Oil Search up 17 per cent, Woodside Petroleum rising 7 per cent, Origin Energy lifting 8 per cent and Beach Energy up 15 per cent.
Oil fell during Tuesday trading as concerns over crude demand in big consuming countries outweighed the initial COVID-19 vaccine-led rally.
Oil has more than doubled from lows of less than $US20 a barrel during the onset of the pandemic earlier this year but at $US39 a barrel remains at levels where many producers would be reluctant to sign off on big capital investments.
No comments:
Post a Comment