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SW Queensland pipeline starts up

Jan. 20, 1997

Queensland Gas Pipelines [33388 bytes] First gas has begun flowing in Australia's newly completed 470-mile Southwest Queensland pipeline, reported Santos Ltd., Adelaide, operator of the South West Queensland (SWQ) Unit producers. The 16-in. line is to transport more than 43 bcf/year from the Cooper basin to Wallumbilla in Southwest Queensland, where it interconnects with a gas distribution system serving residential, commercial, and industrial markets in Gladstone and Brisbane (OGJ, Feb. 5,

Queensland Gas Pipelines [33388 bytes]

First gas has begun flowing in Australia's newly completed 470-mile Southwest Queensland pipeline, reported Santos Ltd., Adelaide, operator of the South West Queensland (SWQ) Unit producers.

The 16-in. line is to transport more than 43 bcf/year from the Cooper basin to Wallumbilla in Southwest Queensland, where it interconnects with a gas distribution system serving residential, commercial, and industrial markets in Gladstone and Brisbane (OGJ, Feb. 5, 1996, p. 27). Cooper basin gas will replace dwindling reserves at Roma, near Wallumbilla.

Sales have commenced, with the first gas provided to Brisbane customers on Jan. 1. Full-scale deliveries are to begin July 1, 1997, following full upgrading of the Ballera gas plant.

Long-term contracts valued at more than $792 million were signed in September 1995 that enabled significant expenditures on the plant, as well as on exploration and field development, said Santos Managing Director Ross Adler.

Construction of part of the pipeline was delayed earlier over a lengthy boundary dispute with aboriginal groups, but the issues were resolved in time to enable completion of the project on schedule by yearend 1996 (OGJ, Sept. 9, 1996, p. 38).

The Southwest Queensland pipeline was formerly owned by a unit of Tenneco Energy. It is now owned by Epic Energy Pty. Ltd., a partnership formed by El Paso Energy Corp., CNG International Corp. and four Australian investors following El Paso's acquisition of Tenneco Energy (OGJ, Dec. 30, 1996, p. 34).

Separately, Santos disclosed that the SWQ producers unit has signed a contract to sell 121 bcf of gas for 15 years, or about 8.1 bcf/year, to WMC Fertilizers Ltd., a unit of WMC Ltd.

This gas is to be used for WMC's Phosphate Hill fertilizer project and substitutes for a portion of gas covered under an option in a contract with MIM Holdings Ltd.

Specifically, MIM signed a contract earlier this year with SWQ producers' unit for 14.25 bcf/year for 15 years (OGJ, Aug. 5, 1996, p. 24). The original contract included an option for MIM to increase its volumes to as much as 23.75 bcf/year.

The new contract with WMC replaces MIM's option to increase purchases to more than 15.67 bcf/year, Santos said. Sales to WMC are slated to begin in January 2000. The contract with MIM begins in April 1998.

Supplies from both deals are to be moved through a proposed 435-mile pipeline connecting Ballera with Mount Isa (see map, OGJ, Jan. 9, 1995, p. 21). SWQ producers hold a 30% interest in the Mount Isa project.