By ERWIN CHLANDA
The Henderson Labor government in 2009/10 locked the Northern Territory into buying gas from an Italian company for 25 years, much of which is unlikely to be needed for local electricity generation.
That deal will force the Power Water Corporation (PWC) to become a player in the fickle market of a commodity threatened by the global move to renewable energy.
The main client of the 100% government owned PWC is Territory Generation (TGen), also 100% government owned.
TGen currently buys $160m worth of gas a year from PWC on a short-term contract which is being re-negotiated for a medium-term deal, but well short of 2030, when the government wants to be 50% renewable, and 2035, when the Henderson deal runs out.
TGen CEO Tim Duignan told a business lunch in Alice Springs last week that by 2030 he expects his company’s demand for gas will shrink to one-third of the current requirement.
The bulk of the gas comes from the Blacktip gas field located 110km off the northern coast of Australia in the Timor Sea’s Bonaparte Basin. The field is 100% owned and operated by the Italian company Eni. First production from the field was achieved in September 2009.
Eni operates in 73 countries around the globe with a staff of 33,000, has a market capitalisation of US$55b and was ranked 65th in the Fortune Global 500 list in 2016.
PWC will not disclose the quantity of gas it has agreed to buy from Eni over the 25 year contact period, nor the price.
PWC says the gas provided to T-Gen for the Owen Springs power station is supplied primarily from the Dingo gas field south of Alice Springs. The remainder of T-Gen’s requirements, an estimated 90%, is supplied from Blacktip.
It is PWC’s understanding that there is currently no supply of gas from Palm Valley west of Alice, a spokeswoman says.
So what will PWC be doing with the volume of gas, steadily growing on the march to the 2030 target, which TGen is not going to buy, in a market where it is difficult to predict what the prices will be in a fortnight, let alone 15 years?
“Yes, there is surplus gas. We are selling gas,” says the spokeswoman. “We’re open for business. We’re not relying on TGen to buy that gas.”
She says the Tennant to Mt Isa pipeline, connecting the NT to the national gas grid, will be an important selling tool.
PHOTOS: Paul Henderson (centre) with Labor candidates (from left) Adam Findlay, Rowan Foley and Deborah Rock and a journalist in August 2012 • ENI oil platform at the Blacktip field.
Tuesday, April 23, 2024
The freedom of the press still furnishes that check upon government which no constitution has ever been able to provide – Chicago Tribune.
I’m not sure what the problem is here?
Given the present gas supply and price issues, locking in a supply at (presumably) 2009 price would seem to be a smart idea.
Again, given the present “crisis” in supply and price, selling off the surplus at a handsome profit should be child’s play.
Given that the gas field, in Australian waters, is 100% owned by a foreign owned company I am curious if we purchase (as Italian foreigners in our own country), the gas at fire-sale prices like much of the gas that we export to Japan and Asia? Surely not. Rather we get the rough end of the pineapple in both deals.
It seems that for the honour of having the resource owned and sold by an Italian company that the NT has to become a compulsory purchaser. Nice one Hendo.
What sort of a deal is that? But it’s pretty typically Third World mentality to sign a contract on any terms and costs really. These companies must take us for the mugs we are.
It’s only the contract details that change. We sell off (99 years) Darwin Harbour and allow our gas to be sold, after processing and transport, in Japan for less that we can buy the same product here. It’s a disgrace. Good one Hendo and Adam.
Our politicians need a good tar and feathering. Can I sell tickets?