Northern Gas Pipeline owner Jemena and Galilee Energy Limited have inked a deal to deliver a new pipeline to the eastern seaboard from Mount Isa.
The agreement fast-tracks Jemena’s plans to build a new pipeline delivering gas produced by Galilee Energy to the east coast and Jemena will begin engaging with local communities, conducting field surveys and completing pipeline design concept works.
Galilee Energy will progress their appraisal activities at the Glenaras Gas Project to certify a proven gas resource large enough to underwrite the pipeline construction.
Galilee Energy Managing Director Peter Lansom said they sat on one of the largest uncontracted contingent gas resources on the east coast.
“The Company’s upcoming lateral program has the potential to unlock this resource into a significant Reserve position,” Mr Lansom said.
“This partnership is all about working together to get this critical gas supply option to the domestic market as quickly as possible.”
Jemena Executive General Manager Corporate Development, Antoon Boey, said large new sources of gas need to be produced and delivered to the market as quickly as possible to overcome the gas supply concerns for the east coast.
“By undertaking the early planning works, both Jemena and Galilee Energy will be ready to proceed to front end engineering and design (FEED) on both pipeline and field development in 2019,” Mr Boey said.
“This project is another key step in Jemena’s plans to expand and extend its Northern Gas Pipeline, via the Galilee Basin, to the largest gas markets on the east coast.”
Construction began in July on the Northern Gas Pipeline, a 622km pipeline from Tennant Creek in the Northern Territory to Mount Isa.
First gas on the pipeline is expected to flow in late 2018.
“Delivering new sources of gas from projects such as the Glenaras Gas Project into the east coast gas market is the simplest way to solve the east coast gas crisis,” Mr Lansom said.
The proposed new pipeline will link Mount Isa to the eastern seaboard via the Galilee and the Wallumbilla Gas Hub near Roma.