THE Northern Territory’s gas pipeline proposal would be crucial to Mount Isa’s economy, local industry sources say.
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There were several options for a pipeline to link the Territory’s gas supply to the east coast, with one of them to be built to Mount Isa and from there link to the Carpentaria Pipeline.
Industry sources supporting the Mount Isa pipeline believe it will create competition and ease gas prices for the region.
Separate industry sources said Incitec Pivot was one local company affected by rising gas prices, which could risk continued operations like Mount Isa’s acid plant and Phosphate Hill south of Mouth Isa.
The company was nearing the end of a contract for gas supply necessary for operations but there was no guarantee it would renew it.
It might close its local operations as a result which could affect industry and employment.
President of local development group Mount Isa to Townsville Economic Zone (MITEZ) David Glasson acknowledged Incitec Pivot was “vulnerable” to the gas market, where gas suppliers could charge what they liked due to lack of competition.
“Our main reason to support this is because we need another supplier: we need another option out there,” Mr Glasson said.
“We would expect customers in the North West to benefit from cheaper pricing if they are able to secure contracts for future supply from NT gas producers.
“MITEZ understand much of the NT gas would flow on south to other markets either on the east coast or possibly to the LNG export industry.”
It is understood there was one other proposal that could rival Mount Isa’s claim; a pipeline from Alice Springs to Moomba, South Australia.
But an industry source says this option is unlikely.
Northern Territory Chief Minister Adam Giles said there was no guarantee the pipeline would be built through Mount Isa but he acknowledged the benefits to the region.
Mr Giles was unwilling to identify specific local companies that could benefit from cheaper gas supply but mentioned gas fired power stations.
It is worth noting the recently built Diamantina Power Station in Mount Isa is jointly owned by APA Group – one of the shortlisted companies expected to submit a final expression of interest for the project.
Mr Giles said the territory government hoped construction will be completed by 2018.
This project which has been estimated to cost $900 million will be built by the successful company.
“After an evaluation by an expert panel in March this year, four private sector proposals have been shortlisted for the project with companies considering several routes including Tennant Creek to Mount Isa,” the Chief Minister said.
The companies expected to submit final expression of interests are APA Group, DDG operations, Merlin Energy Australia and Jemena.
The successful company should be announced in September, Mr Giles said.
A Jemena spokesman confirmed the company was looking at the Mount Isa route and that it would hold an information session in the community soon.
He explained that the company would not set the price of gas if it built the pipeline.
“The price of gas is negotiated between gas producers and their customers,’’ he said.
“Users of our pipelines pay a tariff to have the gas they need delivered to where they need it.”
Pipeline would be huge boost for Mount Isa
MINISTER for State Development Natural Resources and Mines Anthony Lynham says a gas pipeline running through Mount Isa would be a “significant jobs boost” for the city.
“Jobs are this government’s first priority and construction and operations of the pipeline would obviously be a huge boost to Mount Isa and the North West Minerals Province,” he said.
The link from the Northern Territory through Tennant Creek to Mount Isa is vying with two other possible routes – Alice Springs to Moomba and Tennant Creek to Boulia.
Dr Lynham said the pipeline would create jobs for Mount Isa.
“It would generate significant job opportunities for locals in one of the first regional centres that I visited as Minister for State Development, Natural Resources and Mines,” he said.
“That’s why I and staff from my department met the South Australian Treasurer and Minister for State Development and a Northern Territory parliamentary representative in March to discuss the project and how we could make sure it runs smoothly on the Queensland side of the border.”
He said the question of the preferred route of the pipeline will be a matter for proponents.
“The route from Tennant Creek to Mt Isa has distinct advantages: it has fewer water crossings than the alternative and is the shortest option,” he said.
“However, at this point final tenders are not due to be submitted to the Northern Territory Government until September.”
“I look forward to them making a decision and the successful proponent can expect support to make a Queensland option a successful choice.
“My Department of State Development can assist the proponents to progress through regulatory approvals and support the establishment and operations of the pipeline once the route is identified.”
The Northern Territory’s has also put $1million into a feasibility study to investigate a rail line linking Tennant Creek of Mount Isa.
“The question of a rail line between Mount Isa and Tennant Creek has been discussed for many years,” Dr Lynham said.
“I hope the Northern Territory’s decision to put $1million into a feasibility study can reap commercial opportunities generate and jobs for both Queensland and the Northern Territory.”