ASX-listed Empire Energy is preparing to capitalise on the surging gas market after inking a transportation services memorandum of understanding with APA Transmission, a wholly owned subsidiary of APA Group. Under the agreement, the duo will explore opportunities to develop mid-stream infrastructure in the Beetaloo Sub-Basin to support the transport of hydrocarbons from Empire’s assets in the Northern Territory.
Empire looks to be in safe hands, with APA being no stranger to natural gas infrastructure development. The company is Australia’s largest natural gas infrastructure business and owns and operates a suite of gas and electricity assets.
APA’s portfolio includes a network of east coast gas pipelines that have access to several key markets including Brisbane, Melbourne and Sydney. The company’s pièce de resistance is the Amadeus gas pipeline.
The conduit is a bi-directional transmission pipeline that can transfer gas between the northern and southern districts of the Northern Territory with the pipeline playing a key role in supplying energy to Alice Springs, Darwin and several other regional centres.
Interestingly, under the agreement, Empire is not restricted from forming partnerships for the use of the McArthur River gas pipeline. The 300-plus kilometre pipeline penetrates the Beetaloo area but has limited capacity.
Empire’s latest venture looks to be well timed with liquefied natural gas prices surging. The move marks quite the comeback for the energy source with prices, incredibly, vaulting from record lows to record highs in a little less than a year and a half.
According to globally recognised energy research and consultancy group Wood Mackenzie, the climbing prices can be partly attributed to increased demand stemming from economic growth and a frosty northern hemisphere winter followed by a sweltering summer. Production issues impacted by Covid trading restrictions have hindered supply at the same time geo-political pressures been simmering away between Russia and The EU adding further strain on gas supply into Europe.
Empire is not the only company well-placed to take advantage of market conditions. Earlier this year, state-owned Qatar Energy (formally Qatar Petroleum), which operates all oil and gas activities in Qatar, made a final investment decision on a colossal expansion of its North Field project in Qatar. The deal is thought to be the largest ever for a liquid natural gas project.
With natural gas price prices on the rise, Empire’s budding partnership with APA Transmission looks promising, particularly with APA being a steely-eyed veteran in the gas infrastructure space.
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