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Regional South Australian gas plant ready to pump again with Commonwealth assistance

13 March 2020

The redeveloped Katnook Gas Processing Facility near Penola in south-east South Australia is set to again provide natural gas to the region following a major redevelopment, assisted through a $6 million grant from the Federal Government’s Gas Acceleration Program.

The new gas plant which is operated by Beach Energy will process raw natural gas from the nearby Haselgrove-3 well and transport it via pipelines to customers like Kimberly-Clark in Millicent, and others in Mount Gambier and the surrounding region.

Minister for Resources, Water and Northern Australia Keith Pitt said the redeveloped Katnook gas plant will help energy security in South Australia’s south-east.

“The redevelopment of the Katnook Gas Processing Facility is a great regional example of the outcomes provided through the Commonwealth’s Gas Acceleration Program,” Minister Pitt said.

“SE South Australia is an important regional manufacturing area which needs reliable and affordable supplies of natural gas to maintain and grow its local industries.”

The redevelopment project was also supported by the South Australian Government’s PACE Gas Scheme, contributing $6 million to support the original gas discovery in the Haselgrove-3 well.

“Having locally produced natural gas for SA’s south-east will become more important as the region grows and builds its manufacturing sector. It also means more local jobs,” Minister Pitt said.

“The Hazelgrove 3 discovery and other work onshore in SE South Australia is also demonstrating the expensive folly of unscientific bans and moratoria just across the border in Victoria. While Victoria is sitting on undeveloped gas, South Australia is moving ahead to protect its jobs and industries,” Minister Pitt said.

The $26 million Federal Government’s Gas Acceleration Program is speeding up the responsible development of natural gas by supporting five new projects to secure more than 20 petajoules of new gas supplies for domestic customers.

The Gas Acceleration Program and other initiatives under the Liberal and Nationals Government, including the Australian Domestic Gas Security Mechanism and the Heads of Agreement with LNG exporters, have contributed to gas price falls of between 45 percent and 65 per cent across the east coast gas spot markets since the highs of February 2017. East coast spot gas prices are now at between $4-$6 a gigajoule - down from $8.50-$11 a gigajoule in March 2019.

Media contact: Minister Pitt's office 02 6277 7180