The Australian: NT Gas Pipeline Plan ‘Doesn’t Stack Up’

The economics behind the Northern Territory’s new $800 million pipeline simply don’t stack up, a leading oil and gas consultant has warned, and said the project could struggle to meet its key objectives.

Joe Collins, a senior development engineer with Perth-based Resource Investment Strategy Consultants, told The Australian the scale of the proposed pipeline, the shortage of defined gas in the NT and the large gas resources already in place in eastern Australia could all work against the project.

He also said he believed the NT government would be effectively underwriting the development in the form of minimum volume and tariff income guarantees in the contract, unless Jemena — the Asian conglomerate awarded the contract last week — was prepared to carry an unusually high level of risk with the project.

“It has to be the Northern Territory government underwriting this, and they’re taking a real risk here,” Mr Collins said. MORE