NORTH QUEENSLAND GAS PIPELINE

ENERGY

ASSET DESCRIPTION

  • A 391km onshore natural gas pipeline system, transporting gas from the Moranbah Gas Project in the Bowen Basin to power and industrial uses in Townsville, Queensland
  • Constructed and commissioned by Enertrade in 2004 with an expected useful life of 50 years
  • Managed by EIM, an independent operator owned by AGL and Arrow
  • Wholly owned by Palisade investors

INVESTMENT FUNDAMENTALS

  • Monopoly asset – North Queensland’s only source of natural gas and supplies critical power station
  • ‘Uncovered’ – not subject to economic regulation in the form of price and revenue controls. Tariffs negotiated on a commercial basis
  • Revenue underpinned by long-term take-or-pay contracts, escalation linked to CPI
  • Revenue sources supported by electricity generation and industrial users

KEY RISKS AND MITIGATION

  • Availability of gas supply – the MGP and ATP1103 gas fields have c.8,000 PJs of proven, probable and possible reserves
  • Renewal of offtake contracts – offtakers are large industrial users and electricity generators whose assets have long remaining life
  • Contract pricing is currently below where it would likely be should the NQGP become regulated