The $800 million shale gas boost

Published 18-NOV-2015 12:12 P.M.


2 minute read

Hey! Looks like you have stumbled on the section of our website where we have archived articles from our old business model.

In 2019 the original founding team returned to run Next Investors, we changed our business model to only write about stocks we carefully research and are invested in for the long term.

The below articles were written under our previous business model. We have kept these articles online here for your reference.

Our new mission is to build a high performing ASX micro cap investment portfolio and share our research, analysis and investment strategy with our readers.

Click Here to View Latest Articles

The vast amounts of shale gas under the Northern Territory will now have a tangible route to the eastern coast gas market after Jemena was selected as the winner to build a key $800 million pipeline from Tenant Creek to Mount Isa.

A pipeline to connect the Northern Territory to the east coast gas markets in Queensland has been on the tables for years, but the NT government took the step for tendering for a 622km pipeline to Mount Isa.

Jemena, which is owned by the State Grid Corporation of China and Singapore Power, beat out three other proponents for the work.

It is anticipated that the pipeline will come on stream in 2018, providing gas explorers and producers in the future a route to key eastern coast gas markets which are expected to experience a tight supply scenario in light of extra demand caused by LNG plants at Gladstone in Queensland.

The proposed route of the pipeline

The proposed route of the pipeline

According to chief minister Adam Giles, Jemena was selected because it offered cheaper tarrifs to users, cheaper gas processing costs, and had the option of increasing pipeline capacity should the demand warrant it.

At the moment, the pipeline is slated to be a 14 inch pipeline.

According to the NT government, the construction of the pipeline will create more than 900 jobs during construction and offer up to $112 million in contract work for NT businesses.

It is thought that the Northern Territory could hold about 200 trillion cubic feet of gas, which the NT government said could power Australia for 200 years. A lot of this gas is expected to be unconventional onshore gas such as shale gas, but with only a limited access to east coast gas markets via gas swaps there was not a huge economic incentive for explorers to commercialise discoveries.

However, with access to high-price markets it is thought explorers will now be spurred on to look for more shale gas.

“The building of the NEGI will drive commercial exploration and development of currently untapped gas reserves, unlocking the next phase of economic growth for the Territory and helping build a stronger Northern Australia,” Jemena managing director Paul Adams said.

“As further reserves in the NT are proved up, we can expand our scalable pipeline to meet strong demand from east coast customers.”

The state’s Power and Water Commission will also use the pipeline to sell excess amounts of gas it doesn’t need. Some of the PWC’s gas will go to Incitec Pivot’s Phosphate Hill fertilizer operation in north west Queensland, a boon for that operation.

Domestic users on the east coast have struggled to access long-term gas in recent times with the LNG plants sucking available coal seam gas supplies and also dipping into the third-party gas market. The availability of extra supply from the Northern Territory will help ease some of the pressure the users have to tie down long-term contracts.

General Information Only

S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.

Conflicts of Interest Notice

S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.

Publication Notice and Disclaimer

The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.

Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.

This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.


Discover Small Cap
Biotech Stocks

Join thousands of other Investors following our stock commentary for Free