Watchdog Approves Oz Gas Joint Marketing
Australia’s competition watchdog has authorised joint marketing arrangements for Central Petroleum and Macquarie Group for gas produced from the Mereenie field in the Northern Territory (NT).
The chairman of the Australian Competition and Consumer Commission (ACCC), Rod Sims, said March 29: “Joint marketing allows further conventional gas in the Mereenie field to be developed sooner than it otherwise would. This will mean more gas is available for customers in the Northern Territory and Mount Isa regions." The authorisation for the joint venture, which is hoping to be ready to supply gas to the country’s gas-strapped east coast in time for construction of the NT-Queensland Northern Gas Pipeline scheduled for the end of the year, follows the watchdog having granted interim authorisation to the companies on March 2.
“Separate marketing of gas generally results in more competitive outcomes. However, Central and Macquarie are likely to face competition from current and potential rival suppliers of natural gas when supplying commercial and industrial customers in the region,” Sims said: “This competition will likely prevent any attempts by Central and Macquarie to offer their gas at higher prices or on less flexible terms." The authorisation is for three years.
During a period of joint marketing, Central and Macquarie intend to develop new reserves at Mereenie, estimated at between 110-185 petajoules (2.94 to 4.94bn m3). One petajoule is enough gas to supply the residential needs of the Australian east coast cities of Wollongong or Penrith, or one large industrial user, for a full year, the ACCC said.
In its Australian Stock Exchange announcement March 12, Central Petroleum said that the Mereenie joint venture will proceed with drilling a new well at the field and an immediate A$12mn (US$9.2mn) upgrade of the processing plant, which is aimed at increasing its capacity from its present 25 terajoules/day, or 9PJ (0.24bn m3) per annum (of which 15 TJ/d is sold as gas into the NT market, with the balance re-injected) to a new capacity of 63 TJ/d (of which 58 TJ/d will be sold as gas).