ICI Australia Ltd. has secured approvals to build a $170 million (Australian), 1,380 km ethane pipeline from Moomba, South Australia, to its Sydney petrochemical plant.
In addition, ICI will spend $100 million to convert its plant feedstock to ethane from imported naphtha and liquid petroleum gas. And it plans modifications at Moomba gas processing facilities to boost ethane recovery.
The new pipeline will parallel the existing Moomba-Sydney methane line and is expected to go on stream in mid-1996.
What's keep to the deal and represents a major step forward in Australia's interstate pipeline cooperation is the South Australia government's agreement to sell 114 bcf of ethane to ICI in 10 years. Queensland's government will add another 38 bcf of ethane extracted from the Southwest Queensland gas project in the same period. Previously, the South Australia government had earmarked all Cooper Basin ethane supplies for local use, currently Pegged at 247 bcf, in hopes a petrochemical plant would be established in South Australia.
The three way deal also ensures South Australia will receive as much as 237.5 bcf of methane supplies from Queensland. That ensures South Australia will have at least a 20 year supply of methane coming from domestic sources and supplemented by Queensland production that will be transported via a pipeline nearing completion between Southwest Queensland fields and Moomba.
Sale of ethane to ICI is not final in terms of price, but the deal opens the way for much greater degree of open trade across Australian state boundaries than has been the case thus far (OGJ, July 19, p. 14).
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