By Angela Macdonald-Smith
Jan. 16 (Bloomberg) -- Queensland Hunter Gas Pipeline, a closely held venture in Australia, said it will proceed with a A$850 million ($566 million) project even after BG Group Plc scrapped a planned power plant that was to use the line.
The venture is talking to a number of potential alternative customers and is confident of securing contracts in advance of the planned start of construction in 2010, allowing supplies to begin in 2011, Queensland Hunter said today.
BG, which has bought Australia’s Queensland Gas Co., said yesterday it canceled the company’s plan to build the A$750 million Hunter project in New South Wales state because it was uneconomic. The plant would have used about one-third of the capacity of the line, which will run from south Queensland to Newcastle, providing the Sydney region’s third major gas supply.
“Although BG’s decision is disappointing, there is a lot of support for the pipeline,” Bob Otjen, general manager of Queensland Hunter Gas Pipeline, said in the e-mailed statement.
The proposed 830-kilometer (516-mile) underground pipeline will have the capacity to transport 85 petajoules (80 billion cubic feet) a year of coal-seam gas from Wallumbilla in Queensland to Newcastle, the second-biggest city in New South Wales.
To contact the reporter on this story: Angela Macdonald-Smith in Sydney at amacdonaldsm@bloomberg.net
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