THE backers of a $1 billion Newcastle export coal-seam gas terminal say the overall project will cost $2.5 billion if a feasibility study gives the go-ahead at the end of the year.
As well as the $1 billion terminal, Eastern Star Gas is proposing a $500 million pipeline from Narrabri to Newcastle, on a different route from the Hunter to Queensland pipeline promoted by a consortium of Hunter business people.
Eastern Star hopes to start exporting gas by 2014, with more details of the project emerging in a briefing yesterday to the stock exchange.
Chief commercial officer Roland Sleeman said Eastern Star was working with power station builder ERM Power on plans for a gas-fired power station near Wellington.
Under this plan, the gas would go from Narribri to Coolah and Wellington, then on to Bayswater and Newcastle.
Coal-seam gas industry is widely seen as a speculative industry, but Mr Sleeman said Eastern Star would not push ahead with the Newcastle project if it "didn't genuinely believe it would work".
Eastern Star managing director David Casey said the company was talking with potential customers for the gas and believed they "will have a keen interest in assisting with financing" the Newcastle facility.
Mr Casey said Japanese firms Hitachi and Toyo were helping with the feasibility study and would provide the electric gas compressors for the Newcastle plant should the project proceed.
Queensland Hunter Gas Pipeline managing director Garbis Simonian said his company had the best route for a pipeline.