Labor’s fracking moratorium has thrown the commercial viability of the 623km Northern Gas Pipeline into question, according to its owner Jemena.

In a letter to Opposition Leader Michael Gunner nine days ago, obtained exclusively by the NT News, Jemena managing director Paul Adams warned “a full moratorium on fracking for a defined fixed period will completely shut down the onshore gas sector for many years” with a “significant flow on effect.”

“Having won the right to build the NGP, Jemena is committed to pursuing the largest pipeline size possible for the initial construction in order to facilitate the growth of the Territory gas sector,” he said.

“A larger initial pipeline size will result in lower long term gas transportation cost from the Territory.

“Under an actual or potential fracking moratorium the pipeline would likely need to be limited in size to be commercially viable. In this scenario shippers would not be able to source sufficient gas to underwrite a larger pipeline.”

The $800 million NGP is being built from Tennant Creek to Mt Isa in Queensland. The project is partly underwritten by the excess gas of PowerWater, said to be 10 petajoules a year – or 25 per cent of the proposed 14-inch pipeline’s capacity.

The pipeline is expected to create 900 jobs. Labor included the NGP in its jobs policy, which promises to create 12,000 a year, but the flow on from onshore gas alone is predicted to be more than 4200 jobs.

Jemena, owned by the State Grid Corporation of China and Singapore Power, won the right to build, own and operate the pipeline in November last year. No taxpayer funds are being provided.

At the announcement of the NGP in November last year, Mr Adams was clear on where the commercial interest of the project was.

“Our vision for the NGP is to drive commercial exploration and development of currently untapped locked gas reserves for the next phase of development for the Territory and help build a stronger Northern Australia,” he said.

“At this time of seemingly short-termism in governments around the country, it is pleasing to see a long-term vision back something that can be done for the future prosperity of their state.”

Mr Gunner responded to the letter, saying the pipeline would be built and the company had confirmed that.

“We expect that Jemena will build the pipeline based on the best economic evidence available to it,” he said.

“Labor’s sensible moratorium position was made early last year, before the pipeline decision.”

A Jemena spokeswoman confirmed the pipeline would be built but a decision on the pipe size had not been made.