ASSET DESCRIPTION
- A 734km subsea and onshore natural gas pipeline system, transporting gas from Victoria to Tasmania
- Constructed and commissioned by Duke Energy in 2002
- Managed by Palisade Integrated Management Services (PIMS)
- $670m replacement value
- 100% equity interest
INVESTMENT FUNDAMENTALS
- Tasmania’s only source of natural gas
- ‘Uncovered’ – not subject to economic regulation in the form of price and revenue controls. Tariffs negotiated on a commercial basis
- Revenue underpinned by take-or-pay contracts to 2021-2022, indexed to CPI
- Revenue sources diversified through electricity generation, industrial and residential
KEY RISKS AND MITIGATION
- O&M costs and outsourced business management – mitigated by Palisade structuring agreements to include performance incentives to align interests
- Renewal of supply contracts – mitigated by Tasmania need to diversify its power sources
- Contract pricing is currently well below where it would be should the TGP become regulated due to the high asset value
Visit the Tasmanian Gas Pipeline website
