The company, which was selected following bidding process, will build the 623km pipeline, known as North East Gas Interconnector (NEGI).

Firms including APA Group, DUET Group and a company owned by China National Petroleum also placed bids for the proposed project.

Northern Territory Chief Minister Adam Giles said that Jemena, however, offered cheaper tariffs, cheaper gas processing costs and the option to increase the pipeline capacity based on market conditions, before laying the first pipe.

Designed to link Tennant Creek in the Territory to Mt Isa in Queensland, the 14 inch pipeline is planned to be completed by 2018.

Giles added that the project would require no underwriting from taxpayers.

"This nation-building project will generate investment in regional infrastructure and deliver real jobs with no financial commitment from taxpayers.

"Without this pipeline, the populated parts of Australia would have huge difficulty securing their energy needs."

The pipeline project is expected create up to 600 local jobs and offer up to 100 contracts, worth around $112m, for local businesses during the planning, construction, and commissioning phases.

Jemena plans to build a further link connecting Mt Isa to the Wallumbilla hub in Queensland upon unlocking further reserves in the Northern Territory to meet strong demand from east coast customers.

Adams added: "This will vastly improve the reliability of the gas transmission network by reducing sole reliance on Moomba as the hub for supplies."

Northern Territory is estimated to hold more than 200 trillion cubic feet of gas, which is required to power Australia for more than 200 years.

Fertiliser and explosives maker Incitec earlier signed a 10-year deal to purchase gas from NT Government’s Power and Water (PWC), which will supply gas to the NEGI from its contracted suppliers.

Image: Jemena plans to increase the capacity of the pipeline project based on market conditions. Photo: courtesy of supakitmod/ FreeDigitalPhotos.net.