Energy-infrastructure company Jemena has signed a contract with Santos to ship about eight terajoules of gas per day using its Northern Gas Pipeline.
Gas transported as part of the agreement will be used to provide energy for local mining and mineral processing operations in the Mount Isa region.
The new agreement means about 80 per cent of the NGP’s total available capacity in year one of operations has now been contracted.
Jemena’s executive general manager of corporate development, Antoon Boey, said the new contract reinforced the important role the NGP would play in supporting jobs and communities in regional Australia.
“(The) announcement proves strategic investment decisions like the Northern Gas Pipeline can help to mitigate forecast gas shortages while bolstering local industry and strengthening the Northern Territory’s growing gas credentials,” Mr Boey said.
He said the new agreement would see Jemena transport gas for three years for Santos.
“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, which 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,” Mr Boey (pictured) said.
Santos managing director and chief executive, Kevin Gallagher, said the agreement was a great example of how Santos was collaborating across the supply chain to make domestic gas available where and when it was needed, efficiently and at competitive prices.
“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,” Mr Gallagher 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.”
The agreement comes after Jemena announced it had signed a contract with Incitec Pivot Limited to deliver 32 terajoules of gas per day to IPL’s Gibson Island facility in Queensland.