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Storage opportunity available on Tasmanian Gas Pipeline

With more than 65 terajoules per day (TJ/d) of firm transportation capacity and more than 150 TJ of firm on-demand storage available, the Tasmanian Gas Pipeline (TGP) holds one of the largest and most operationally flexible gas transportation capabilities in the Australian natural gas market today.

In addition to the benefit of supplying Tasmania with piped natural gas, the TGP’s unique interconnection with the Eastern Gas Pipeline and the VicHub injection point offers the opportunity for gas to be stored in the TGP and injected into the Victorian Transmission System at times of peak demand.

Currently the Victorian natural gas market is limited in its storage options to liquefied tank facilities and large underground gas storage reservoirs. Both of these options require the natural gas to be pumped into the storage facility and then withdrawn through a complex and time consuming process. In some instances, the time required to get the gas out of such a facility is in excess of 24 hours, which reduces the opportunity to leverage off gas storage at times of peak demand.

With more than 150 TJ of firm on-demand storage available, the TGP provides the operational flexibility which surpasses the more traditional current storage options available.

For a gas peaking plant located in Victoria, the ability to have available more than 150 TJ of firm on-demand storage for use at peak periods to generate electricity presents a good investment opportunity. This is because on-demand storage potentially does away with the contracting party having to enter into an expensive gas supply agreement, which provides the flexibility of peak gas while still maintaining access to firm gas at
peak times.

For a natural gas retailer or large industrial business operating in Victoria, the ability to have available more than 150 TJ of firm on-demand storage provides the opportunity to adequately hedge their position in the gas retail market. The ability to readily redirect gas into or out of storage, in the event of being caught long or short, enables the reduction of the exposure to intra-day varying market or operational conditions.

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