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Jemena to extend NSW gas pipeline

PIPELINES & AUSTRALIAN pipeline operator Jemena has modelling suggests an extension of the EGP
TRANSPORT unveiled plans to plans to extend its Eastern Gas would be capable of delivering upwards of 300
Pipeline (EGP) by around 185 km north from TJ [7.81mn cubic metres] per day to the Hunter
New South Wales’ capital city of Sydney to the Valley, which can be used to generate approxi-
Hunter Valley region. mately 1,500 MW of electricity.”
The infrastructure company said on Sep- The executive said Jemena was preparing to
tember 28 that the extension of the 797-km begin community and stakeholder engagement
EGP would connect the region, which is home on pipeline route options.
to Newcastle and the Central Coast, to existing Jemena’s announcement comes after it
domestic gas fields. Moreover, it is also expected revealed earlier in the month that it intended to
to expand access to liquefied natural gas (LNG) connect EGP with the proposed Port Kembla
import terminals proposed at both Port Kembla LNG import terminal via a 6-km spur.
and Newcastle. In order to handle increased gas supplies,
Managing director Frank Tudor said his com- the company wants to expand EGP’s capacity by
pany intended to invest upwards of AUD400mn 25% while also modifying the pipeline to move
($287.23mn) to extend the pipeline north from gas bi-directionally between NSW and Victoria.
Horsley Park into the Hunter Valley. Jemena EGP is currently capable of delivering 360
expects to make a final investment decision TJ per day of gas from Longford in Victoria’s
(FID) on the extension project by the end of Gippsland region to Sydney and Canberra.
2021, with first gas to flow in 2023. However, the upgrade would allow Jemena to
Tudor said: “Our project is ideally placed to deliver more than 200 TJ (5.21 mcm) per day of
shore up supply for industry in the region and gas from NSW to the Victorian market, while
would be capable of servicing new gas-pow- being able to supply up to 450 TJ (11.72 mcm)
ered generation on the Central Coast. Our early per day to NSW.™

Australian prices could

rise on Narrabri approval

PROJECTS & AUSTRALIAN power and gas prices could rise “Consumers will be paying for new pipelines
COMPANIES following the approval of Santos’ Narrabri coal- in addition to the cost of production at the fields,”
bed methane (CBM) development, as the gas Robertson said. “This deal is a financial red flag,
must travel huge distances to reach customers to both electricity consumers and taxpayers who
and generating facilities on the coast. will wear the cost of expensive gas infrastructure
The proposed Narrabri gas fields are une- investment under the Federal government’s
conomic, Institute for Energy Economics and planned subsidies to the industry.”
Financial Analysis (IEEFA) financial analyst Bruce He added: “The gas industry has been suffer-
Robertson told the New South Wales’ Independent ing write-down after write-down, even before
Planning Commission (IPC) in a submission. the pandemic hit. They are sinking hand over
Prior to the IPC’s approval of Narrabri on fist, yet the government is intent on throwing
September 30, Robertson said Santos could not public money to an industry that itself says it
supply gas to Sydney and make a profit from the can’t deliver cheap gas to Australian consumers.”
proposed Narrabri gas fields. Robertson concluded that Narrabri’s
“Even the gas industry is saying they can’t deliver high-cost gas will force up prices for domestic
gas at the government’s desired AUD4 [$2.85] a consumers.
gigajoule, which is the only way gas, and therefore “While we pay even more for gas, which
electricity prices, will drop,” said Robertson. forces up the cost of electricity, the govern-
“Narrabri gas will be high-cost gas to produce at ment-subsidised gas companies will continue to
AUD8.50 [$6.07] a gigajoule, meaning gas consum- export our lower-cost sources of gas.”
ers are likely to see higher, not lower gas prices if the He said domestic gas prices had risen since
fields are approved. You can’t produce high-cost gas 2014, with producers exporting more gas as
and lower the cost of gas. It simply doesn’t make sense.” LNG. This has resulted in large increases in gas
Robertson argued that Narrabri gas will cost and power tariffs for both domestic and indus-
AUD6.40 ($4.57) a gigajoule at the well head plus trial users. Industrial gas demand had fallen by
AUD2.10 ($1.50) a gigajoule for transmission to Sydney. 14%, he said.™

P10 www. NEWSBASE .com Week 39 01•October•2020