MOST of the profits from the gas that will flow through Mount Isa in the pipeline to be built will go to China and Singapore, an American report says.
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The Institute for Energy Economics and Financial Advice published a report last week that said the foreign government owned corporation to own the North East Gas Interconnector (NEGI) would monopolise the gas piped from the Northern Territory.
In essence an Australian government has handed the governments of Singapore and China an unregulated natural monopoly for the transport of gas between the NT and QLD."
- Institute for Energy Economics and Financial Advice
The pipeline is to be built from Tennant Creek to Mount Isa by 2018, linking the territory’s gas resources to the east coast.
Jemena was 60 per cent owned by the Chinese government and 40 per cent owned by the Singaporean government.
The report also said that Jemena has not paid tax to the Australian Government in the previous four years – which could be due to deduction claims for property, plant and equipment.
While some tax should be paid in 2016 the government corporation’s shareholders restructured how they were to be paid last year, the report said.
The report explained $800 million was to be paid to shareholders by a convertible note which technically classifies as debt – therefore reducing the profit of the corporation before it was taxed.
“The deal between the government and the project owners would allow for an unregulated and largely untaxed monopoly,” the report said. “In essence an Australian government has handed the governments of Singapore and China an unregulated natural monopoly for the transport of gas between the NT and QLD. It is to these governments that the bulk of the natural wealth of the Northern Territory gas will accrue if the pipeline should go ahead.”