Oz Senex, Jemena Ink Agreement (Update)
(Adding comment from Appea at end)
Australian infrastructure firm Jemena has signed an agreement with Senex Energy to build infrastructure related to Atlas gas project, Jemena said June 18.
Jemena will build, own, and operate the Atlas Gas Processing Plant and Pipeline (AGPP), connecting Senex’s new Atlas gas field in the Surat Basin in south-east Queensland with Jemena's Darling Downs Pipeline and the Wallumbilla Gas Hub – the largest gas hub in the country. Jemena said its solution also leverages the Darling Downs Pipeline which provides direct access to the Wallumbilla gas hub and offers Senex flexibility to sell its gas to a broad range of Australian gas customers.
Jemena will invest around A$140mn ($104mn) to build the gas plant and 60-km pipeline which is capable of transporting approximately 40TJ/d of gas. Jemena’s managing director, Paul Adams, said the AGPP will provide additional volumes into the domestic market for a range of commercial and industrial gas users.
“The Atlas gas field is the first of 13 gas exploration tenements awarded by the Queensland government as part of a broader move to fast-track the development of new gas to the domestic market. Jemena will construct the AGPP on an expedited schedule in order to deliver first gas by the end of 2019,” said Adams.
Senex CEO Ian Davies said the agreement was an important step forward for Atlas project. “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.”
Adams said the AGPP will build on Jemena’s Northern Growth Strategy to develop an interconnected supply chain of gas infrastructure assets across northern Australia.
“We know there is continued demand for gas across the east coast and that northern Australia will play a leading role in meeting this demand by bringing new gas to where it is most needed, via the most direct and economic route,” said Adams. “The AGPP is another crucial addition to our plans in northern Australia and allows us to play a leading role in bringing a new source of gas supply and greater competition to the market.”
Upstream lobby group Australian Petroleum Production & Exploration Association said the news was "the latest in a string of new Queensland projects bringing more gas to market: "In the past year we have seen significant announcements from Arrow Energy, Shell Australia, and Senex to bring on new supply."
“At the end of February, Santos announced that it would spend almost A$1bn on its Roma East project, while APLNG is expected to spend A$3bn on activities this calendar year.... The failure of NSW and Victoria to develop their own gas supply means customers in those states are paying a premium for their gas. The Australian Competition and Consumer Commission says transport costs can add 25% to the price southern customers pay for Queensland gas.”