PERTH (miningweekly.com) – ASX-listed Senex Energy has struck an agreement with infrastructure operator Jemena to partner on the accelerated development of Project Atlas, in Queensland, to deliver first gas to the domestic market by late 2019.
Under the agreement, Jemena will build, own and operate a gas processing facility with an initial capacity of 40 TJ/d and a 60-km pipeline to process and transport gas from Project Atlas via the Darling Downs pipeline to the Wallumbilla hub.
Jamena will fund the A$140-million capital required to construct and commission the facility, with Senex to deliver raw gas into the downstream infrastructure and Jemena to deliver sales specification gas into the Wallumbilla gas hub, at multiple delivery points.
Senex will also pay an agreed tariff for delivery of sales gas to the domestic market over a 25-year term.
Senex MD and CEO Ian Davies said on Monday that the agreement was an important step forward to Project Atlas.
“We are extremely pleased to be partnering with Jemena to develop Project Atlas. Jemena operates significant gas infrastructure across the east coast and their involvement in Project Atlas will allow us to focus our efforts and capital on the upstream, delivering gas to domestic customers from late 2019.”
Davies added that the transaction delivered a material component of Senex’s overall funding requirement, adding that the company was on track to finalise the remaining corporate and development financing in mid-2018.
“With our financing in place and our path to market established, we will then engage with potential domestic gas customers. We are systematically bringing together all the critical elements for a successful project to deliver first gas to the domestic market in 2019, a major achievement for a greenfield gas development.”
The Queensland government has welcomed the A$140-million investment, with Natural Resources, Mines and Energy Minister Dr Anthony Lynman saying some 200 jobs would be created.
“In Queensland, we continue to do the heavy lifting to meet the gas supply needs of Australia’s east coast. This is terrific news for the Downs and for Senex and Jemena,’’ Lynham said.
The Australian Petroleum Production and Exploration Association (Appea) noted that the Queensland economy would be a major beneficiary of the new gas development. Appea’s Queensland director, Rhys Turner, noted that in 2016/17 alone, Queensland’s gas industry supported, directly and indirectly, more than 27 000 jobs and provided more than A$9-billion in total value-added activities in the state through direct, indirect and consumption-based activities.
“New South Wales and Victoria should take note. Saying 'no' to gas development means saying 'no to jobs, royalties and lower energy prices'. The failure of New South Wales and Victoria to develop their own gas supply means customers in those states are paying a premium for their gas.”
The Queensland Resources Council (QRC) also pointed out that the A$140-million project vindicated the Queensland government’s decision to release the land specifically for the development of gas for the domestic market.
“The project includes a 40 TJ/d gas processing facility and pipeline to deliver gas from the Project Atlas natural gas acreage near Miles in the Surat basin to the Wallumbilla Hub, the gateway to the domestic gas market,” QRC CEO Ian Macfarlane said.
"That's equivalent to the daily gas consumption needs of around 1.2-million Australian households. It’s another example of industry working with industry and the government to deliver fast, effective and focussed outcomes.”