The Victorian Government has decided to extend the deadline of its $85 million tender to supply natural gas to various country towns, at the request of energy companies keen to put forward detailed proposals.

Energy companies have shown strong interest in the tender, with all requesting extensions on the 4 December 2013 due date. Tenders are now due in the first quarter of 2014.

The Victorian Government believes the extension will help produce the best possible proposals, and therefore outcomes, for regional communities.

The $85 million tender is for the supply of compressed natural gas (CNG) or liquefied natural gas (LNG) to the remaining priority towns under the Energy for the Regions Program, and to Murray River communities. Bids which maximise the reach of natural gas supply, producing the best outcome for regional communities, will be favoured.

Some $30 million is allocated for the Murray River communities: $15 million from the Commonwealth Government and $15 million from Victoria’s Regional Growth Fund. The Regional Growth Fund is also investing $55 million to connect the remaining priority towns: Lakes Entrance, Invermay, Heathcote, Orbost, Warburton, Marong, Terang and Maldon.

Natural gas costs about a third the price of the bottled gas these communities are currently using and will encourage more business investment in these areas.

The Government has agreed to the extension of time, given the complex commercial nature of bids required. These bids require new partnerships to create a complete supply chain, from sourcing, retailing and supply of natural gas.

A key evaluation point of the tender will be the supply of extra regional industries and regional residents, known as “Program reach”.

Bidding companies will also submit extremely complex designs for extensive gas reticulation networks within target towns.

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