The Dampier to Bunbury Pipeline says it is holding discussions with gas shippers that could result in support for a $1 billion expansion of the asset.
The Dampier to Bunbury Pipeline says it is holding discussions with gas shippers that could result in support for a $1 billion expansion of the asset.
The natural gas pipline owner said the proposed stage 5 expansion is expected to be required by as little as two years from now and would cost more than double the current stage 4 expansion.
the full announcement is below:
DBP Pursuing Early Commitment to Stage 5 Expansion
The Dampier Bunbury Pipeline (DBP) board has authorised expenditure of nearly $1 million for
Front End Engineering and Design (FEED) for the proposed Stage 5 expansion of the Dampier to
Bunbury Natural Gas Pipeline.
DBP Executive Chairman Stuart Hohnen said the consortium of owners - comprising DUET, Alcoa
and Alinta - is pursuing an early commitment to the Stage 5 expansion.
"The Stage 4 expansion has met DBP's obligation to spend at least $400m on expansion within five
years and DBP is very keen to continue to expand the pipeline on commercial terms," Mr Hohnen
said. "DBP is conscious of the importance of pipeline expansion to the economic development of
the south west."
Mr Hohnen said DBP was currently in discussion with prospective shippers for significant new
demand which would support a further expansion of the pipeline. This new capacity is expected to
be required between late 2007 and early 2009, nearly two years ahead of previous expectations.
Initial estimates indicate that costs for the Stage 5 expansion could be up to $1 billion, more than
twice that of the current $430 million Stage 4 expansion.
The proposed Stage 5 expansion would provide a significant boost to the Western Australian
economy as a substantial construction project as well as providing means of enabling other parts of
the WA economy to continue to grow.
Mr Hohnen said that key milestones for a commitment to Stage 5 were to:
- reach agreement with stakeholders on design parameters relating to gas quality;
- finalise the engineering design and costing for the expansion;
- reach agreement with shippers on potential modifications to contractual terms to ensure
adequate compensation;
- obtain support from its bankers for the necessary funding; and
- obtain approval from the Regulator for the additional costs of the expansion, particularly
those required to accommodate the changes to gas specifications.
"DBP will be taking a proactive approach to the expansion, working with shippers, producers, the
Regulator and Government to expedite Stage 5 for the benefit of all," Mr Hohnen said.
* Dampier Bunbury Pipeline is the trading name of the DBNGP group of companies, ultimately
owned by the consortium that purchased the Dampier to Bunbury Natural Gas Pipeline in October
2004. DBP is majority owned by DUET - Diversified Utility and Energy Trusts - with Alcoa and
Alinta being minority owners.
Media Contact
Media contact: Tony Robertson (08) 9486 3014 or 0419 867 230
Stuart Hohnen, Executive Chairman DBP (08) 9223 4300 or 0419 923 749
