Australian gas pipe builder Jemena plans expanded line to ease supply woes

SYDNEY (Reuters) -- The builder of an $600-MM gas pipeline that could ease a looming shortage in eastern Australia said on Friday it will boost the capacity of the planned pipeline if a ban on fracking in Australia's north is lifted.

Photo Courtesy of Jemena.

Jemena, owned by State Grid Corp of China and Singapore Power, which is building the 386 mi pipeline from northern Australia to Queensland state, is also "well advanced" in plans to extend the pipe further east, a company spokesman told Reuters.

The comments come amid a growing gas supply crisis in Australia that on Thursday prompted the national government to lay out a radical plan for restricting LNG exports in order to keep a lid on domestic prices.

Jemena's pipeline from Tennant Creek to Mount Isa is seen as a crucial leg in easing the shortage in the east, by potentially unlocking the vast gas resources in central and northern Australia.

The Northern Territory government is currently reviewing a ban on fracking in the region, but has set no deadline for making a decision.

"We do expect to boost the capacity of the pipeline, provided the moratorium in the Northern Territory is lifted and additional gas supplies made available," Jemena spokesman Michael Pintabona told Reuters on Friday.

"The whole landscape has changed with the release of the forecast that there'd be shortages."

He added that Jemena is "well advanced in our feasibility studies" to extend the pipeline further east, to connect with the Wallumbilla gas hub, and so reach east-coast markets where gas prices have soared.

"What our ultimate plan is, is that once that gas supply is shored up in the Northern Territory, we'll be able to pump through as much gas as is required," Pintabona said.

Rivals had criticised Jemena's decision, taken a year ago, to build the pipe narrower than planning permission allowed.

That choice was taken in April 2015 ahead of an expected decision to put a moratorium on fracking, which was seen limiting potential gas flows along the pipe, Pintabona said.

However, the pipeline's capacity could be expanded by duplication, or by increasing the pressure of the gas by installing additional infrastructure, he said.

Construction of the pipeline is yet to begin, owing to delays securing approvals.

A spokeswoman for Northern Territory Resources Minister Ken Vowles was not immediately available for comment.

Reporting by Tom Westbrook; Editing by Richard Pullin

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