Australia's Northern Territory backs the construction of a new pipeline to link the remote gas-rich region with gas-hungry southern and eastern Australia, the territory's chief minister said Wednesday.
"It is estimated that we have over 30 trillion cubic feet of gas offshore and up to 240 Tcf of conventional and unconventional gas reserves onshore," Adam Giles said.
"Currently, we have 13 operational pipelines across the Territory, including one running the length of the Territory from Darwin to Alice Springs in the Red Centre, and we are aiming to connect that to southern domestic markets and alleviate the looming New South Wales gas crisis."
NSW is expected to face a gas crunch after next year, when the first of three LNG export plants in neighboring Queensland start exporting LNG from new plants fed mainly by the state's coalseam gas reserves.
"APA Group is investing [A]$2 million ($1.87 million) into a feasibility study to join its two Northern Territory pipelines with its east coast grid," said Giles.
Giles, who was speaking at the opening of the South East Asia Australia Offshore and Onshore Conference in Darwin, also said the NT government was "working closely" with the state government of South Australia on connecting the northern and eastern markets through a new line to the gas hub of Moomba in central Australia.
Speaking at a conference session later Wednesday Rob Wheals, group executive transmission at Australia's APA Group confirmed that the company, which dominates gas transmission in Australia, was looking at seven options along three routes to link its NT pipeline with southern and eastern pipeline networks, with one option being a new line to Moomba.
The Moomba option was "attractive" because it could also link to the prospective onshore Cooper Basin, said Wheals.
NT NEEDS MORE INFRASTRUCTURE
Giles acknowledged that the sparsely populated Northern Territory is short on modern infrastructure.
"The reality is we're about 150 years behind the rest of Australia, and we need a mammoth investment in roads, rail and ports to realize our full economic potential," he said.
Recent dredging of Darwin port has increased access for larger vessels and contributed to a 19% rise in cargo trade last year, he said.
The NT government is seeking private investment to expand the existing Darwin port and is working on plans for a second port, he added.
On Tuesday, Giles opened a new A$110 million Marine Supply Base at the port.
The new facility is owned by the NT government and will be operated by marine logistics firm Asco.
Oil companies including Shell, ConocoPhillips, Eni and Inpex have already indicated they will use the MSB, Giles said at the opening ceremony.
In his conference comments Wednesday, Giles noted that the NT sees itself as being "inside the Asian circle, rather than on the periphery of Australia." Giles said Asia accounted for more than 90% of NT's exports, at A$6.4 billion, in the last financial year.
It only takes nine days for a LNG carrier to sail from Darwin to Tokyo, Giles said.
"And that gives the Territory a distinct advantage."
Most of the 8.4 million mt/year LNG due to be exported from the Inpex-led $34 billion Ichthys plant being built at Bladin Point, outside Darwin, will be sold under contract to Japanese and Taiwanese buyers, he said. However, joint venture partner Total will take 1 million mt/year for its global LNG portfolio, Total E&P Australia Managing Director David Mendelson said at a later SEAAOC session Wednesday.
In addition to Ichthys, the ConocoPhillips operated 3.5 million mt/year Darwin LNG plant, which sources its gas from the Bayu-Undan fields in the Timor Sea off northern Australia, has been operating since 2006, while Ichthys LNG is scheduled to start exporting at the very end of 2016. Once Ichthys starts operations Darwin will supply roughly 10% of Japan's LNG needs, the chief minister said.
Noting that Shell's Prelude floating LNG project offshore Western Australia is due to start exporting in 2017, Giles said the NT government was "watching how the FLNG story unfolds very closely. Because we can see the potential for Darwin to become a major supply base for offshore petroleum projects in Australia's northern waters."
Turning to exploration, Giles outlined the territory's business-friendly policy on onshore exploration -- most offshore waters are federal in Australia -- including a A$23.8 million government program called Creating Opportunities for Resource Exploration or CORE.
"The CORE initiative is the largest investment to support the exploration industry ever made by a Territory Government," Giles said.
Departing from his prepared comments, Giles ended by slamming federal regulations and labor laws, and joked that one of NT's favorite sports was "Canberra bashing."
