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622-km gas pipeline project underway in NT

622-km gas pipeline project underway in NT


The Northern Territory Government has finalised the first stage of its $800 million gas pipeline, which will connect Tennant Creek in the NT and Mount Isa in Queensland.

Firms: Clayton Utz (Northern Territory Government); Herbert Smith Freehills (Jemena)

Deal: The NT Government has successfully closed the first stage of its North East Gas Interconnector (NEGI) project.

Value: $800 million

Energy and resources

Key players:
Partners Owen Hayford (pictured) and Margaret Michaels co-led the Clayton Utz project team, which included senior associate Gavin Phillips and senior lawyer Dipesh Jasmat in the Darwin office, Brisbane partner Andrew Smith and senior associate Natalie Watson, as well as lawyer Hannah Stewart-Weeks in Sydney.

Deal significance: 
The NT Government announced last week that it had selected Jemena Northern Gas Pipeline Pty Ltd (Jemena) to construct and operate the 622-kilometre NEGI pipeline. The pipeline will run between Tennant Creek in the NT and Mount Isa in Queensland, delivering gas from the NT to eastern gas markets.

According to a release by Clayton Utz, the NT has an estimated 200 trillion cubic feet of gas that could power Australia for more than 200 years.

Clayton Utz advised the NT Government on all aspects of this first stage, including developing the strategy for delivery of the project (involving two competitive processes in parallel, for the sale of surplus gas, and for the delivery of the NEGI and associated gas transportation services), negotiating the project documents with the two preferred proponents, evaluating initial and final proposals, and drafting the final project documents.

"The Northern Territory Government has secured in return for baseline gas shipments an entirely private sector financed, funded and developed pipeline,” said Mr Hayford. 

“That is a great outcome for the NT Government and Territorians. At a macro level, it will significantly improve security of gas supplies to the Eastern seaboard and provide NT gas producers with a new market into which they can sell their gas, as well as stimulating the development of the Territory's vast on-shore gas reserves."

The NT Power and Water Corporation will be a foundation customer of the NEGI, having entered into a 10-year gas sale agreement with Incitec Pivot, at Phosphate Hill near Mount Isa.

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