Key Points

• Power and Water Corp is hoping Beetaloo gas will fix supply issues

• Eni's Blacktip gas field continues to undersupply

• The Department of Industry CEO says the delay in commissioning solar farms is "unacceptable"

The Northern Territory government-owned Power and Water Corporation (PWC) is planning to buy and on-sell tracked gas from the Beetaloo Basin to make money, budget estimates have revealed.

For the past 18 months, PWC has had to turn to an emergency gas agreement with LNG exporter Inpex to keep generators running because its long-term supplier has not been able to meet demand.

Italian energy company Eni has attempted to boost supply from its Blacktip gas field by drilling a new well but output has not increased significantly, forcing PWC to look elsewhere for more gas.

PWC chair Peter Wilson told a budget estimates committee this week the corporation had "active discussions" with Beetaloo gas companies Empire Energy and Tamboran Resources about "enabling that supply to come to Darwin".

"We have problems with Eni ... but the longer-term prospects for gas supply with Beetaloo are very strong," Mr Wilson said.

"We have to navigate this [Blacktip supply] dip, which we've been able to do to date, and hopefully Beetaloo will give [gas] access to Territory customers."

Not only is PWC hoping Beetaloo gas can be used to generate electricity, but it is also looking to on-sell the gas.

PWC has projected revenue from gas sales to reach $402 million in the 2028/29 financial year, up from

$235 million in 2022/23, according to its latest statement of corporate intent.

Mr Wilson said that projection was based on "expectations that we'll be able to put in new arrangements with producers, primarily in the Beetaloo".

"And the expectation of a huge amount of gas being available to the Territory from the extensive resource [in the Beetaloo]," he said.

Both Tamboran and Empire have announced their first gas supply from the Beetaloo could commence in 2024, subject to approvals.

Shadow Minister for Renewables and Energy Joshua Burgoyne said the gas supply issues "should be a huge concern to Territorians".

"As a result of the ongoing disputes with Eni Energy, the Territory is having to pay more to top up our supply- this is simply outrageous," Mr Burgoyne said.

"What this means is that we have no idea how much we are paying for our gas up front in the former arrangement with Eni despite this not being delivered, or how much we are paying to other providers under emergency provisions to top up our supply."

PWC would not reveal the cost of the emergency gas, citing commercial-in-confidence arrangements.

"We have a number of contingency arrangements in place with offshore and onshore suppliers that are used as required to ensure ongoing electricity supply to Territorians and to other customers through contractual agreements," a PWC spokesperson said.

'Emergency' INPEX gas being on-sold

he reduction in Blacktip's supply has also impacted fertiliser manufacturer Incitec Pivot, which has a contract to buy excess gas from PWC to run a mine near Mount Isa in north-west Queensland.

PWC chief executive Djuna Pollard said it could offer its contracted customers emergency gas taken from Inpex as part of its supply contract.

"They are not obliged to take that gas from us," Ms Pollard told budget estimates.

"They can source gas from the east coast gas markets, as an example. It's a commercial decision for those contracted customers."

Neither Incitec Pivot nor PWC would confirm to ABC Rural if any emergency gas from INPEX had been transacted.

In June, Incitec Pivot said it had been informed by PWC that Blacktip's supply issues would be ongoing until mid-2028, and the gas shortfall could cost it up to $90 million by the end of the financial year.

Last week, PWC commenced a dispute resolution process with Eni to get an understanding of why the gas company was not meeting its supply agreements.

What about renewable energy?

The Northern Territory government has a target to reach 50 per cent renewable energy by 2030.

But just 5.5 per cent of NT electricity was generated by renewables in 2022, according to data from the federal Department of Climate Change and Energy.

Nearly three years after four solar farms with a combined output of about 55 megawatts were built, none are consistently putting power into the Katherine to Darwin grid.

The Katherine solar farm - built by Eni - dispatched a small amount of electricity into the grid for nearly 10 weeks to the end of March as part of its commissioning process.

However, this week Department of Industry CEO Shaun Drabsch said the delay in getting the solar farms on line was "not acceptable".

"It has taken far too long," he said.

"The under-treasurer and I have been meeting regularly with proponents and PWC on these matters for an extended period of time.

"We're confident that we're getting towards the end of that, and we hope that we will be in a position very shortly where firming is provided, and they can provide solar energy into the system on a more consistent basis."

The NT government expects 15 per cent of electricity to be produced by renewables by the end of 2023.

Source: ABC Rural news daily

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