SEA Gas Pipeline to be Expanded

The SEA Gas underground pipeline from Victoria to South Australia is to be significantly expanded. Under a deal signed yesterday, International Power, Origin Energy and TXU have become equal equity participants in the expanded SEA Gas pipeline, now worth approximately $500 million.

The expanded SEA Gas pipeline will avoid the potential requirement for a second pipeline from Victoria to Adelaide while boosting the supply of gas through the line from up to 70 Petajoules per annum to 125 Petajoules. The diameter of the 680 km pipeline will be increased from 360 millimeters to 450 millimeters.

SEA Gas Chairman Dr. Ed Metcalfe said the outcome was very positive for the project and for South Australia. "The SEA Gas pipeline is one of the most important energy infrastructure projects in Australia and will meet the needs of a range of energy providers in South Australia and Victoria, " Dr. Metcalfe said. "We have all worked very hard over the past few weeks to deliver this solution which supplies more gas to South Australia within our original timetable and without causing any additional disruption to landholders in Victoria and South Australia. "The pipeline is now being re-engineered to carry more gas and this should not cause any delays as many of the approvals have been obtained and much of the preparatory work has already been undertaken," Dr. Metcalfe said.

The original schedule for construction of the pipeline remains on target for October 2002 and SEA Gas expects that gas will begin to flow to SA in late 2003, with the pipeline in commercial operation by January 2004. SEA Gas has awarded the major pipeline engineering, procurement and construction (EPC) contract to a joint venture between AJ Lucas Joint Ventures and Spie Capag Australia Pty Ltd. A contract for the first compressor station has also been awarded to HPS Technology Pty Ltd.

Natural gas will initially be produced from two offshore Victorian gas fields – Minerva, located about 10 kilometers offshore from the South-West Victorian coast near Port Campbell and Yolla, about 100 kilometers offshore from Western Port, further east along the Victorian coast. The pipeline will also expedite the development of Thylacine and Geographe gas fields through assured access to the South Australian and the Victorian gas markets.