Leading independent Asia-Pacific oil and gas producer Santos has signed an agreement with INPEX subsidiary Jemena to ship gas through Australia’s Northern Gas Pipeline (NGP).
Under the three-year deal, Santos will transport approximately 8 TJs of gas per day across the AU$800 million (US$595 million) pipeline to local mining and mineral processing operations in the Mount Isa region in Queensland, Australia.
With transportation agreements already in place with the Northern Territory’s Power and Water Corporation and Incitec Pivot Limited, the Santos deal means approximately 80 per cent of the 622 km NGP’s total capacity has been contracted for its first year of operations.
Jemena Executive General Manager of Corporate Development Antoon Boey said the agreement would be extremely beneficial for the community in the Northern Territory.
“Today’s announcement proves strategic investment decisions like the NGP can help to mitigate forecast gas shortages while bolstering local industry and strengthening the Northern Territory’s growing gas credentials,” he said.
“This agreement provides more much needed gas to the mining and processing sector in the Mount Isa area, and is a positive for the local community, who will benefit not only from jobs which rely on gas as a direct feedstock, but from the flow-on effects of having a vibrant local economy and industry.”
Santos CEO Kevin Gallagher said the NGP is a valuable piece of infrastructure for gas transportation going forward.
“This is a great commercial outcome for all the parties involved and it is also good for the east coast domestic gas market, connecting the Northern Territory into this supply grid,” he said.
“It’s absolutely critical that we continue to open up new gas supply sources to service the domestic market as existing, mature fields decline.”
Mechanical works on the pipeline were completed last month, with first gas expected later this year.
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