NGP construction contract up for grabs

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 28 Mar 2017   Posted by admin

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Image: Jemena.

By Elizabeth Fabri

THE $800 million Northern Gas Pipeline (NGP) project construction contract will soon open for retender after project developer Jemena terminated its deal with McConnell Dowell mid March.

The contract, first announced in November 2015, was for the assembly of the Northern Territory portion of the 622km pipeline connecting the Tennant Creek gas fields to Mt Isa in Queensland, but was torn up last month amid project delays and ‘resequencing’ plans.

“We confirmed and advised McConnell Dowell that we decided to part ways with them and that was principally because of the contract, as the way the contract was structured was no longer fit for purpose,” a Jemena spokesperson said.

“There are other details to it but they are commercial and confidential and things that I can’t share, but ultimately it was about whether or not this was right for us and it wasn’t.”

The news came three weeks after Jemena announced it was ‘resequencing’ the schedule, pushing back first construction from April to June to finalise outstanding land access approvals, which it has since secured with traditional owners.

The resequencing also saw Jemena alter its schedule to begin pipeline construction in Queensland instead of the Northern Territory.

“The resequencing gave us more time to look at this and have conversations with traditional owners in the Northern Territory and it also gave us time to look at the contract,” the spokesperson said.

“The Queensland portion of the project was always going to be constructed by a different supplier and that’s because in QLD the rock that we need to go through is different, so it’s a different skill set.”

Jemena said despite the company now preparing for a retender, the project was still on track to begin construction in May/June and deliver first gas in 2018.

“The way that’s been project managed is that we can still go through another tender process and we’ll need to do that for the Northern Territory section and we anticipate doing that shortly,” the spokesperson said.

“We haven’t worked through the details of it but our ambition would be to get that up and running as soon as possible, so it’s a reasonable assumption that within the next month we will be going back out to market for the NT portion of it.”

Jemena confirmed it may conduct some of the early works in the Northern Territory itself, including land clearing.

“In that case we would be procuring locally, so this may actually result in additional jobs within the local area which is a positive outcome for the local community,” they said.

Jemena thanked McConnell Dowell on its efforts on the project and that the company was “keen to maintain a positive relationship”.

“They were with us from the beginning and were the partner that we took to the initial tender back in 2015,” the spokesperson said.

“We appreciate their support all the way through and thank them for that, and also understand that this would be a disappointing decision for them.”

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