New gas offer on the table for Gove

Image courtesy of [Victor Habbick] \ FreeDigitalPhotos

The Northern Territory government is preparing to present Rio Tinto with an amended gas offer for its Gove aluminium refinery, which the mining giant had threatened to close.

Image courtesy of [Victor Habbick] \ FreeDigitalPhotos
Image courtesy of [Victor Habbick] \ FreeDigitalPhotos
According to a published statement by NT Chief Minister Adam Giles, its new 175 PJ gas offer now on the table for Gove is an even better offer despite “incorrect” and “irresponsible” reports by ABC and Member for Nhulunbuy Lynne Walker last Wednesday.

Walker accused Mr Giles of making it up as he goes along and said that the CLP Government could not be trusted.

‘‘The whole future of the town is in jeopardy and he simply does not care,’’ the Labor Party politician said.

The first announcement of 195+ PJ of gas for Gove was a dual fuel model which would give Rio Tinto a combination of gas and cheaper heavy fuel. The original split announced on Darwin Show Day was 129 PJ: 69 PJ gas to heavy fuel — roughly 2/3 to 1/3.

Giles said that Rio had informed the government during private meetings in August that it would prefer to just deal in gas, and not in a dual fuel option, as it could source its own heavy fuel.

Government officials did some further negotiations and gas field analysis with another company and found an additional 46 PJ of gas.

The current government offer now stands at 175 PJ – clearly an increased offer compared to 129 PJ.

Additional to this offer is up to 78 PJ to be provided by Santos from Mereenie, according to an NT News article.

High operating costs and market pressures have led Rio Tinto to consider closing the refinery if it could not find natural gas sources to replace diesel at the plant.

According to Giles, Walker should stop scaring the people of Gove with incorrect data and instead acknowledge genuine efforts by the government, Eni, Santos, APA and ConocoPhillips to improve the gas offer.

The Territory Government will continue to speak with Rio Tinto in seeking to secure the long term future of Gove.