Gas has stopped flowing through the only pipeline from the Northern Territory to the east coast, highlighting uncertainty in the region’s gas supply.
The Northern Gas Pipeline (NGP), which connects the NT’s gas fields to Mount Isa and the east coast, was commissioned in January 2019 after an $800 million construction cost.
At its peak, the pipeline transported about 90 terajoules of gas per day, however it has been plagued with supply issues.
In 2022, the NGP supply issues forced the NPG to shut for three months, then in 2023 the pipeline transported no gas for a further three months over two separate periods.
The NGP again stopped transporting gas in early February and last week pipeline operator Jemena informed NGP customers it expected gas flows would not resume until at least June.
“Gas flows along the Northern Gas Pipeline ceased due to an upstream supply constraint — we’re working closely with key stakeholders including the NT government and the NT Gas Taskforce in response to this evolving situation,” a Jemena spokesperson said.
“While the NGP is not operating, we understand arrangements have been made to ensure the gas needs of customers in Mount Isa continue to be met.
“We do not see the supply shortage as impacting the long-term operation of the NGP.”
Blacktip gas supply issues
Since 2019, the bulk of the gas transported through the NGP has come from Italian company Eni’s Blacktip field in the Joseph Bonaparte Gulf.
The NT government-owned Power and Water Corporation (PWC) has a long-term deal to buy gas from Eni to run its electricity stations.
Any excess gas not needed for electricity generation was sold by PWC to Incitec Pivot’s Phosphate Hill mine near Mount Isa.
But since early 2021, output from the Blacktip gas field has reduced by about 85 per cent — so much that there’s not enough to fully run PWC’s Channel Island power station.
In recent months, PWC has had to rely on an emergency gas agreement with Santos to take gas from its LNG export facility in Darwin Harbour to keep generators running.
ABC Rural understands Eni aims to drill a new well at its Blacktip gas field to increase production.
Eni has not responded to multiple requests for comment.
Central Petroleum can’t sell gas
Central Petroleum is the only onshore gas supplier in the Northern Territory, producing in the Mereenie Basin, south-west of Alice Springs.
Managing director Leon Devaney said if Eni could not rectify its supply issues, the NT and its electricity supply would be in a precarious position.
“You’re looking at having to utilise alternative sources of gas, like diverting LNG exports back into the domestic market or even reversing the NGP so you’re importing gas from the east coast,” Mr Devaney said.
“The market will get balanced and there will be gas. It’s just where does that gas come from and what is the cost of that gas to customers in the NT?
“From our perspective, this is a transitional period and a period of a lot of uncertainty as to how core production for the NT will play out over the coming months. And that will really reshape what the NT gas market looks like.”
Central Petroleum is unable to supply its customers on the east coast because of the NGP outage.
The company said it was “working with key NT stakeholders and customers to re-contract gas to NT customers for the duration of the outage”.
