The pipeline will carry gas from Tennant Creek in the Northern Territory to Mt Isa in Queensland, providing energy for local mining and mineral processing operations in the region.

The new agreement means around 80% of the NGP’s total available capacity in year one of operations has now been contracted.

Jemena’s executive general manager of Corporate Development, Antoon Boey, said the new contract reinforced the important role the NGP would play in supporting jobs and communities in regional Australia.

“Today’s announcement proves strategic investment decisions like the Northern Gas Pipeline can help to mitigate forecast gas shortages while bolstering local industry and strengthening the Northern Territory’s growing gas credentials.”

The agreement comes after Jemena announced it had signed a contract with Incitec Pivot to deliver 32TJs of gas per day to IPL’s Gibson Island facility in Queensland, which employs around 400 staff during normal operations and up to 800 staff during peak periods.   

And Jemena recently announced that it has signed an agreement with Senex Energy to build, own, and operate the Atlas Gas Processing Plant and Pipeline, connecting Senex’s new ‘Atlas’ gas field in the Surat Basin in south-east Queensland with Jemena’s Darling Downs Pipeline and the Wallumbilla Gas Hub – the largest gas hub in the country.

Boey said the new Northern Gas Pipeline agreement would see Jemena transport gas for three years from the first day of commercial pipeline operations for Santos.

“This agreement provides more much-needed gas to the mining and processing sector in the Mount Isa area, and is a positive for the local community, who will benefit not only from jobs which rely on gas as a direct feedstock, but from the flow-on effects of having a vibrant local economy and industry.”

Santos managing director and chief executive Kevin Gallagher said the NGP transportation agreement reached with Jemena was a great example of how Santos is collaborating across the supply chain to make domestic gas available where and when it is needed, efficiently and at competitive prices.

“This is a great commercial outcome for all the parties involved and it is also good for the east coast domestic gas market, connecting the Northern Territory into this supply grid.

“It’s absolutely critical that we continue to open up new gas supply sources to service the domestic market as existing, mature fields decline.”