Incitec Pivot Ltd. (IPL), Southbank, Victoria, said on June 25 that consistent with news announced in March (GM March 2, p. 29), it has signed agreements for the interim gas supply to its Gibson Island nitrogen plant in Queensland from the commencement of the commercial operations on the Northern Gas Pipeline (currently anticipated to be December 2018) until Dec. 31, 2019. Without a new gas supply, IPL had warned that the future of the Gibson Island plant was in jeopardy.
“While the finalization of the interim gas agreements is a significant step, it is just one of several in our ongoing efforts to secure future operations at Gibson Island,” said Jeanne Johns, managing director and CEO.
IPL said the new agreements will increase manufacturing costs by approximately A$50 million in fiscal year 2019. IPL is continuing to assess options for sourcing gas for Gibson Island for calendar year 2020 and 2021.
The various agreements for supply and delivery have been entered into with Central Petroleum Ltd. and certain of its subsidiaries, Macquarie Mereenie Pty Ltd., subsidiaries of APA Group, and Jemena Northern Gas Pipeline Pty Ltd.
As previously announced, IPL has entered a joint venture with Central Petroleum to develop a gas tenement acreage in Queensland. The project is being fast-tracked, with IPL committing $20 million for drilling and appraisal works, which are expected to be completed during calendar year 2019. If sufficient reserves are proven, it is anticipated that development of the acreage will start to yield gas in 2022 and supply Gibson Island’s gas needs.