Jemena has announced that it will be expanding its Eastern Gas Pipeline (EGP) by around 20 per cent to meet growing demand for natural gas in NSW and the ACT.
Comprising the installation of two new midline compressor stations at East Gippsland and Michelago, plus additional delivery facilities, Jemena expects to complete the nearly $150million expansion project by the start of 2016.
The EGP is a vital link connecting gas from Victoria’s Gippsland Basin to the east coast market, transporting more than half the gas consumed in NSW. The expansion will allow the transportation of at least an additional 22PJ of gas per annum into NSW.
Supporting the expansion is a new Gas Transportation Agreement (GTA) with AGL Energy Limited, who has purchased capacity on the EGP for the next 15 years.
Jemena Managing Director, Paul Adams, said NSW is a critical market for Jemena. The EGP feeds into the company’s distribution network, which delivers natural gas to more than 1.2million homes and businesses across Sydney and in regional NSW.
Mr Adams said the GTA deepened the company’s longstanding partnership with AGL to supply the east coast market, bringing much-needed additional gas into NSW.
“Demand for gas in NSW remains strong, despite some potentially challenging conditions in the short term. Expanding the EGP now means we’ll be ready to move more gas into the market and help offset projected supply and price pressures for customers,” he said.
“With the EGP primed to deliver more gas into NSW at a competitive price, we are also proposing to lower our distribution charges for the majority of our customers by 40 per cent in real terms over the next five years, encouraging them to continue to utilise gas while the market adjusts to new economic conditions.”
The EGP expansion is the latest project to enhance Jemena’s transmission pipeline network.
Earlier this year, Jemena increased capacity on the Queensland Gas Pipeline (QGP) by seven per cent, delivering around 10TJ/day of additional firm capacity. The QGP delivers gas from the Surat/Cooper Basin to the Gladstone and Rockhampton markets.
Mr Adams said the company had invested around $180 million in its gas transmission assets over the last few years, increasing capacity and developing new delivery points to offer customers even more competitive and reliable gas transportation and storage options.
“We’re focused on continually expanding and improving our transmission infrastructure so we can make the most of opportunities from onshore gas development and gas exports,” Mr Adams said.