Tennant Creek gets the pipeline, not Alice Springs

p2295-gas-pipeline-PR-3

PHOTOS: Publicity images promoting gas as a heat source, from the Jemena website.

p2295-gas-pipeline-PR-2

 

By ERWIN CHLANDA

 

Jemena, jointly owned by State Grid Corporation of China and Singapore Power, has been awarded the NT Government’s closely guarded contract to build the gas pipeline.

 

As disclosed in a reader’s comment in the Alice Springs News Online at 7:09 pm yesterday, the pipeline will go from Tennant Creek 622 km east to Mount Isa, not from Alice Springs south-east to Moomba.

 

This means The Alice will not get much of the spin-off, especially during the construction phase, from the $800m project.

 

Alice Deputy Mayor Steve Brown says: “This is not what Alice Springs was hoping for. But I guess we need to look at the benefits for the Territory as a whole. It is not clear whether there is anything in it for us.”

 

Mr Brown says he had briefings from two competing bidders who were going to build a bigger pipeline (the one announced is going to be 14 inches) and there would have been “a massive number of jobs”.

 

This would have been mostly during the construction phase but “it would have been handy for the next two years,” says Cr Brown.

 

But Chief Minister Adam Giles, who announced the deal this afternoon, put a positive spin on the project, saying there would be no need for “any underwriting from taxpayers.

 

“Make no mistake, this is, and always has been, about jobs for Territorians,” says Mr Giles, who is also the Member for Braitling, in a media release.

 

He gives no estimate of the royalties to be earned by the NT Government, but says they will “go towards the vocational education and training and other areas of the education sector” as well as “better roads, schools and hospitals for Territorians”.

 

“Construction will create more than 900 jobs, 600 of which will be for locals and offer up to 100 contracts for local businesses worth about $112 million. There will be ongoing maintenance and operations teams based in Tennant Creek and Mt Isa,” he says.

 

“Jemena expects construction to be completed by 2018.”

 

Meanwhile Naomi Hogan, of the Lock the Gate Alliance NT, which is opposed to fracking, says: “Groups in the firing line have vowed to stop the pipeline in order to protect their lands and communities.”

 

In a release she quotes Gadrian Hoosan, a Gulf region Traditional Owner from the Gurawa Land Trust: “We’ve got family right through the pipeline area and up through the NT Gulf country, all who are going to be affected when this pipeline drives dangerous fracking gas fields across the Territory.”

 

Says Ms Hogan: “Chief Minister Giles said in 2013 he didn’t want NT gas ‘hosed out in exports’ yet that’s exactly what this controversial pipeline will do.

 

“This pipeline is nothing but a gas giveaway to wealthy overseas companies that want to frack our land and send our gas offshore.”

 

Enterprises 100 per cent owned by Jemena (from the company’s website):-

 

Electricity Network (The 11,000km system delivers electricity to more than 319,000 homes and business in north-west Melbourne).

 

Gas Network (Established in 1837, the 25,000km system delivers gas to more than 1.3 million homes, businesses and industrial customers in New South Wales).

 

p2295-gas-pipeline-PR-1Queensland Gas Pipeline (627km pipeline delivers gas from the Surat / Cooper Basin to the Gladstone and Rockhampton markets).

 

Eastern Gas Pipeline (Our 797km pipeline delivers gas from Victoria’s Gippsland Basin to Sydney, the ACT and regional New South Wales).

 

VicHub (Our pipeline interconnect enables gas to flow between the Eastern and Tasmanian Gas Pipelines as well as the Victorian gas transmission network).

 

Colongra Gas Transmission and Storage Facility (pipeline and compressor station transports and stores gas for Delta Electricity’s 667MW gas fired peaking generator).

 

Aquanet Rosehill Recycled Water Scheme (20km recycled water scheme transports 20M litres of water per day to the industrial centres of Western Sydney).

 

 

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17 Comments (starting with the most recent)

NB: If you want to reply to a previous comment, start your comment with this notation: @n where n is the number of the comment you want to reply to.
  1. Dr Wrongo
    Posted November 19, 2015 at 6:59 am

    So basically all the information in Access Economics is all just wild guesses and BS provided by industry to achieve their goals.

    View Comment
  2. Charlie W
    Posted November 18, 2015 at 7:53 pm

    Hi Harold. Yeah all good. I agree. But sometimes it is good just to make sure the 100,000 readers of the Alice Springs News are clearly advised / reminded when facts and figures are paid for by the gas industry lobby to possibly serve propaganda purposes.
    Let’s all read this line again together shall we:
    “Deloitte Access Economics Pty Ltd has not independently tested or verified any of the inputs and advice received from Gas Industry sources regarding the assumptions. Many of the stakeholders that participated in the process and reports used to inform the study were unable to validate all assumptions due to commercial sensitivities and because of information gaps stemming from the infancy of shale and tight gas development in the NT.”
    6900 jobs! LoL. 7.2 billion dollars. LOL.
    Don’t get me started on Dr Allan Hawke and the credibility of his five word report.
    [ED – For our readership information please note the Google Analytics statistics we publish, updated about monthly.]

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  3. Charlie W
    Posted November 18, 2015 at 7:06 pm

    @ Francis: The point of my commentary is that the gas pipeline will make SOMEONE a lot of cash (or provide a nice steady supply of gas for someone else’s nation building plans).
    But comparatively, on average, Territorians will see bugger all benefit.
    If what you say is true (i.e. that min $20m royalty p.a. is guaranteed) that’s still a pretty dismal amount of $90 to $110 per Territorian.
    As to your other comments, firstly, I reckon your capacity to link these royalties to school expenditure smacks of desperation.
    Further, your capacity to call people xenophobic simply because they question whether selling our public assets off to the Chinese is a smart move, all things considered, is just a cheap and easy way to try to shut down debate on a much bigger issue that should concern all Territorians (and Australia).
    But I guess you’re one of those types that couldn’t give a stuff about human rights, the common wealth or the national interest (all that airy fairy stuff) … am I right, Francis?

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  4. The Barkly Magpie
    Posted November 18, 2015 at 2:05 pm

    From the ABC’s Queensland Country Hour website:
    South Australia Mining Minister Tom Koutsantonis has asked Federal Minister for Resources, Energy and Northern Australia Josh Frydenberg to intervene in the pipeline decision.
    He said the Queensland route, despite being cheaper and shorter, would make gas more expensive for customers in southern states, including New South Wales, where demand was high.
    The southern route would have connected the pipeline with Santos’ existing gas processing facility in Moomba.
    Mr Koutsantonis said the gas would still have to be pumped to the Cooper Basin site if it needed to be processed.
    “They’re going to go up to Mount Isa, because it is the shortest physical route for a pipe, then they’re going to pump it back to Moomba to be processed for the southern gas market,” he said.
    “This means those consumers will pay more.
    “It’s a very disappointing decision because it is not about nation building, it is about a short term fix.”

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  5. Harold
    Posted November 18, 2015 at 1:04 pm

    @ 3: I would expect those disclaimers to appear at the bottom of just about any specific purpose accounting type report. There really doesn’t seem to be anything exceptional contained within the disclaimers.
    Regarding your comment on tourism, I certainly agree.
    What I’d ask is what do you think we should be doing differently to get that extra night.
    I’d further ask why it would need to be one or the other. If the extra night in the NT could be secured without further cost, then logically the benefit, understandably unreliable at present, of the gas royalties would be able to deployed elsewhere.

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  6. Francis
    Posted November 18, 2015 at 11:42 am

    Charlie W: Do you really think that the private sector is stumping up nearly $1b for a pipeline that won’t make a lot of cash?
    Jenema’s operational profit depends on profit from sales that benefits us.
    One fixed priced deal for gas has already been signed and more are on the way so there is no concern that the price of gas will collapse.
    Our royalties of 20 million are for each year so 10 years means 200 million on schools, roads etc.
    The pipeline is based on existing reserves, so no additional fracking is needed.
    Not saying there won’t be more fracking but none is needed for this project.
    And Charlie, get over your xenophobia, almost all investment is now open to the world and we are all better off for it.
    And Giles didn’t sell out the Territory with this deal, given that the Feds wouldn’t put Northern Development funds into it, he took the only deal on offer and it is a good one.

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  7. GBC
    Posted November 18, 2015 at 10:34 am

    What have fracking and a pipeline got in common? Build the pipeline to carry gas from off shore, one side of Australia to the other, to the east coast. Fracking may or not come, it is another issue completely. Gas pipelines run all over NSW and Vic carting gas with no fracking.
    Interesting comment recently where a hot water service installer is suggesting electric hot water systems be used rather than gas as it is the same price or cheaper?
    We sell our gas overseas for a fraction of what we pay locally, where is the screaming about that?

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  8. Charlie W
    Posted November 18, 2015 at 10:22 am

    Francis. You may describe this as a political win for Giles. Ok sure. But I ask you: at whose expense? The average Territorian will see bugger all.
    Anyone with half a clue knows that Giles sold out the Territory’s hand as quick as he could so he could trumpet “he is getting things done!”
    Anyone with a bit of wisdom would have played the game much smarter and diversified strategies … rather than have so much focus on one lacklustre and divisive industry: fracking.
    And let’s not forget that other decisions such as the Darwin port sell off (also to Chinese state-backed investors) are all part of the big picture politics going on here.
    In effect Giles has failed the Territory.
    He has gambled with the future of all Territorians and only time will tell how much we are going to lose … for so little gain.

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  9. Hal Duell
    Posted November 18, 2015 at 10:17 am

    @ Francis, posted November 18, 2015 at 9:11 am: Sorry, did I miss something? Are you saying there will be a pipeline across the Simpson?

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  10. Charlie W
    Posted November 18, 2015 at 10:10 am

    For those actually interested in the truth, there is a good chance the payback to the average Territorian will never come close to the industry promoted figures!
    Check out the tax and royalty facts for the gas industry at a fed level here:
    “GAS SECTOR TAX TAKE FLATLINES”
    http://m.smh.com.au/federal-politics/political-news/gas-sector-grew-12fold-in-a-decade-to-60b-but-tax-take-flatlines-20151113-gkyil4.html#ixzz3rklRACza
    Whilst this describes things more at a Federal level, the fact is that due to the gas price, market trends and general uncertainty about the industry, any royalty take at an NT level will likely be dramatically less than the already lacklustre figures quoted above!

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  11. Charlie W
    Posted November 18, 2015 at 9:59 am

    @ Harold: All this risk, division and opportunity lost just to get a VERY aspirational $35m per year? If we could get our tourists and visitors to the NT to stay one more day, it be more than cover that amount! I know which industry I’d prefer getting all the government attention.

    AND I am being kind to the gas industry by using their figures taken from their “Best Case Scenarios”. Here is their fine print:
    1. GENERAL USE WARNING:
    This report is prepared solely for the use of the Australian Petroleum Production and Exploration Association (APPEA). This report is not intended to and should not be used or relied upon by anyone else and we accept no duty of care to any other person or entity. The report has been prepared for the purpose of considering the potential economic impacts on the NT from the possible development of fracking.
    2. LIMITATIONS (you should read this Harold):
    Some of the core assumptions which underpin the financial and economic models have been developed by Deloitte Access Economics Pty Ltd with input from APPEA, its members, other stakeholders and publicly available data and information. Deloitte Access Economics Pty Ltd has not independently tested or verified any of the inputs and advice received from these sources regarding the assumptions. Many of the stakeholders that participated in the process and reports used to inform the study were unable to validate all assumptions due to commercial sensitivities and because of information gaps stemming from the infancy of shale and tight gas development in the NT. Therefore, Deloitte Access Economics Pty Ltd takes no responsibility for the accuracy of the assumptions adopted in the modelling, or the modelling outcomes.
    To the extent that there is any error in the report, the report information, or any other relevant information providers have failed to provide additional relevant information; the report may be incorrect or unsuitable for use.
    Neither Deloitte Touche Tohmatsu nor Deloitte Access Economics Pty Ltd provides any assurance on the reliability of any forecasts or projections set out in the report or the reasonableness of any underlying assumptions. All forecasts and projections (including prices) have been built on assumptions developed from public information and feedback from APPEA and industry stakeholders and are for illustrative purposes only. Since forecasts or projections relate to the future, they may be affected by unforeseen events and they depend, in part, on the effectiveness of actions in implementing the forecasts or projections. Accordingly, actual results are likely to be different from those forecasts or projected because events and circumstances frequently do not occur as expected, and those differences may be material.

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  12. Francis
    Posted November 18, 2015 at 9:11 am

    Hal your relief that the Simpson Desert, a vast unpopulated expanse of endless sand dunes looks safe from being crossed by a pipeline is just a little ridiculous.

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  13. Harold
    Posted November 18, 2015 at 8:16 am

    @3 I admire your passion, but $150-$200 per Territorian per year may not sound like much. However, if the census data is what’s being used for that calculation, we’d be looking at between $35m and $50m per year.
    That appears to be a decent amount of funds, especially if spent wisely.
    Obviously protection of underground water supplies precedes any discussion on economic benefits. I guess we’ll have to wait and see on that one.

    View Comment
  14. Hal Duell
    Posted November 18, 2015 at 7:20 am

    OK, so Tennant gets the pipeline and the construction goes to a company that, from its website quoted in the article, is already heavily involved in Australia’s gas and water infrastructure in the eastern states. Done deal?
    And Alice? It looks like we may be getting the nuclear waste facility, or at least the Aridgold Date Farm on the Old South Road is on the short list.
    This raises a number of interesting questions. Among them, is there any guarantee that the facility, whether here or at one of the other short-listed sites, will not be expanded into a world dump as advocated by, among others, former PM Bob Hawke?
    And if the date farm is chosen, what transport infrastructure would be required? Would they seal the existing road south from Alice, or would they build a new road west to a new purpose-built rail siding?
    At least the Simpson Desert looks safe for now. No pipeline, and no improbable waste facility at “Hale” on the Old Andado Road. But I do wonder about the reasoning behind all the reported road works carried out past Santa Teresa.
    Something tells me this story is far from over.

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  15. Francis
    Posted November 18, 2015 at 5:28 am

    The pipeline project is a personal and political win for Giles.
    He has demonstrated that he is pro development and in turn that will bring higher incomes and better services to Territorians.
    This project isn’t going to see gas exported but will drive Australian industry.
    Under pressure to kick in TIO sale money he resisted and now we have a massive NT development funded by the private sector.
    Royalties from the sale of gas come to Territorians.
    When the next election comes next year Giles will be able to show that he is a man of action with the interests of Territorians at heart.
    By contrast the other parties will be seen as stuck in the past, lacking the vision and drive to move us beyond our “handout” status.
    And it’s just the beginning, Giles has other projects on the way.
    I have never voted CLP but well done Giles and his team.

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  16. Charlie W
    Posted November 17, 2015 at 9:38 pm

    Anyone who wants to run the line saying there are no government funds put into this pipeline needs their head checked.
    OK, so we got China to stump up the cash for the infrastructure. But in case you haven’t been following there was nearly $10m put into to pay the companies to participate in the tender process.
    And don’t forget the tens of millions of dollars keeping the machinery of government going – a government whose whole developing the north vision is predominantly about pushing this fracking future onto Territorians.

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  17. Charlie W
    Posted November 17, 2015 at 9:36 pm

    OK, so they went with the “let’s bring in China option” and chose not put Territory or Federal money into it.
    Great statesmen-like vision for the future CLP! Clearly you believe in the future of this industry! Clearly you get the idea of national interest! Yay CLP! Master strategists!
    So anyway let’s break this down. Is there an upside for Territorians?
    1. The asset is owned by China.
    2. The gas gets sold to the East coast (or at a later date China?) But to be even vaguely economical for the investor they need open up the Territory to the dodgy fracking industry that promises to divide communities and risk water supplies.
    3. The royalty payback to the government equates to $150 to $200 royalty per Territorian per year, IF the best case scenario comes into play, i.e. according to the gas industry’s own best-case figures via their own “specially commissioned” report. In reality the average Territorian may never see anything like this.
    4. So NET result: Bugger all money for the average resident, divided communities, a massive risk to our water supply and lots of fly in fly out cowboys.
    Great.

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