The two companies have signed a binding agreement to collaborate on development milestones to fast track Jemena's plans to build a new pipeline to get more gas to market. 

 

Jemena and Galilee will proceed to front end engineering and design in 2019, so gas will arrive to market in 2022; however, given the shortfalls are widely expected to continue into the next decade the gas will likely not be hitting an oversupplied market even in the longer-term. 

 

Galilee plans to progress appraisal activities at the Glenaras gas project to certify a proven gas resource large enough to underwrite the pipeline construction. 

 

The junior has 4000sq.km of ground, with one of the largest remaining uncontracted gas supplies on Australia's east coast, with 1C reserves of 308 petajoules, 2C of 2508PJ and 3C of 5314PJ. 

 

Jemena will soon start engaging local communities, conducing field surveys and completing pipeline design concept works.

 

Jemena says this is a key step in its plans to "expand and extend its Northern Gas Pipeline via the Galilee Basin to the largest gas markets on the east coast". 

 

The Chinese-backed pipeliner has previously said that extending the NGP would be the only way to held save the east coast's gas shortfall, and that developing the NT's shale gas reserves were needed to meet this aim.

 

Galilee managing director Peter Lansom said that his company has one of the largest uncontracted contingent gas reserves on the east coast. 

 

"The company's upcoming lateral program has the potential to unlock this resource into a significant reserve position. This partnership is all about working together to get this crucial gas supply option to the domestic market as quickly as possible," he said. 

 

The construction of the Northern Gas Pipeline began in July and is expected to create 600 local jobs, with first gas expected late next year. 

 

Jemena executive general manager of corporate development Antoon Boey said large new sources of gas need to be produced and delivered to the market as quickly as possible were needed to overcome the gas supply concerns currently gripping Australia's east coast. 

 

"By undertaking the early planning works, both Jemena and Galilee Energy will be ready to proceed to FEED on both pipeline and field development in 2019 with the objective of first gas to market in 2022," he said.

 

"The simplest way to solve the east coast gas crisis is to develop new sources of domestic supply. Jemena's plans to transport more gas from Northern Australia have the potential to provide affordable and reliable gas supply across north and eastern Australia for decades to come."

 

Construction of the NGP started in in July and is progressing to schedule to flow in late 2018.

 

This announcement follows other optimistic signs for the east coast gas market, such as a favourable rating of Blue Energy's large undeveloped Queensland prospects and a plan by Ebony Energy for a Territory coal-to-gas plant that might have the potential for 55PJ supply by 2025.