Article – Fertiliser giant Incitec Pivot signs deal to get Northern Territory gas18 November 2014
13 November 2014
A proposed gas pipeline from the Northern Territory to eastern states would be a huge boost to the viability of Australia’s largest fertiliser manufacturer, Incitec Pivot.
Resources company, Central Petroleum, has just signed a heads of agreement with Incitec Pivot to supply 15 petajoules of gas annually, based on the anticipated construction of the NT pipeline.
Incitec’s Stewart Murrihy says development of remote gas fields in the Northern Territory and piping it to the east is an essential project for Australia.
“Lower gas prices won’t mean lower fertiliser prices…but it will help underpin the viability of fertiliser manufacturing in Australia,” he said.
“So either have this pipeline come to Mt Isa (Queensland) where it’s connected into the east coast, or even down to Moomba (South Australia) – it’s essential that it happens.”
Mr Murrihy says cost pressures on manufacturing in Australia are substantial.
“Australia has always had high wage costs as it should,” he said.
“We have always had high regulatory costs as we should.
“But one of the advantages we’ve had in the past is low energy costs or at least [energy costs] that are comparable with other countries.
“And what we’ve done effectively, is given away our competitive advantage to North Asia and Australian gas will be value-added in North Asia and not in Australia and that’s sad.”
Managing director of Central Petroleum, Richard Cottee, says there’s enough natural gas in the Territory to create gas supply competition and the right price point for Australian manufacturers.
“It’s used for glass manufacturing, it’s used for fertiliser, it’s used for transportation,” he said.
“All of the Brisbane City Council buses are natural gas.
“There are products that can’t be used by renewable energies that gas has to supply or we’ll have to find ways to import all of the stuff.”
The Northern Territory and New South Wales Governments last week signed a Memorandum of Understanding in support of the proposed pipeline.