Finishing touch to network

ENERGY company AGL Energy has secured a deal with Epic Energy that will allow building of a $140 million gas pipeline.
The deal with complete the network linking gas markets in the eastern half of Australia.
The proposed 180km pipeline – the QSN Link – will take gas from Queensland to the Moomba-Adelaide and Moomba-Sydney pipelines.
AGL managing director Paul Anthony said it would create the final link to form an interconnected eastern Australia pipeline network as well as delivering gas into AGL's wholesale gas hub at Moomba at prices below existing contract levels.
"This link is strategically important in monetising and delivering the coal-seam methane AGL acquired with our recent upstream gas investment in, and gas contract with, Queensland Gas Company," he said.
The pipeline will carry up to 390 petajoules of natural gas along the Wallumbilla-to-Moomba corridor over 15 years from January 2009.
Epic Energy, the owner and operator of the Pilbara energy pipeline in Western Australia and the South-West Queensland pipeline, would build, own and operate the QSN Link and new compression facilities.
A spokesman for Adelaide's Santos, Australia's biggest gas producer, welcomed the announcement.
"There'll be more gas flowing in and around Moomba," he said. "This will increase the `optionalities' for supply and distribution.
"From South Australia's perspective, it will enhance the security of gas supply."
Santos is currently the subject of a State Government inquiry into whether a 15 per cent limit on any one holding of its shares should be lifted. One of the reasons for the share cap being imposed in 1979 was to ensure security of supply to SA.
The state's vulnerability already has been eased by the SeaGas line from Victoria and the Queensland link will further reduce reliance on Moomba.
An analyst, who declined to be named, said the deal could be negative for Santos by taking "pricing pressures out of the Cooper Basin".
"But they have seen this coming for a long time, so I don't think it will be a big problem," the analyst said.
AGL's Mr Anthony said the agreement would introduce new competitive sources of gas into the NSW, southern Australia and Mt Isa gas markets.
"It will support core upstream and downstream gas projects we are working on at the moment and is a further demonstration of the company's focused delivery of its strategic growth," he said.
The pipeline was possible following recent investments by AGL. They include buying a 27.6 per cent stake in QGC in conjunction with entering into a 20-year gas contract after the acquisition of Adelaide's 1280-megawatt gas-fired Torrens Island power station from TRUenergy.
Construction is due to end by December, 2008.