DBP completes negotiations

Dampier to Bunbury Natural Gas Pipeline owner DBP Transmission has completed negotiations with a majority of customers that use its pipeline, in a move it says will reduce its long-term risk profile.

The pipeline is the only natural gas pipeline bewteen the Carnarvon Basin and the Perth metropolitan area.

The renegotiated contracts establish tariffs until 2020, with the new ‘standard shipper contracts’ to last until between 2025 and 2033.

There are two further five-year extension options.

DBP says this significantly extends its contract coverage, lowering its financial risk profile.

Customers will also benefit with greater certainty of their transportation costs, the company says.

Improved certainty over volume and longer contract length has also enabled DBP to reset its interest rate hedging program during a period of low interest rates.

Chief executive officer Stuart Johnston said it was an excellent outcome for both DBP and clients.

“It demonstrates that it’s possible to reach a pragmatic commercial outcome, providing greater certainty over the medium term,” he said.

DBP's 80 per cent owner, Duet Group, was up 0.6 per cent to $2.43, while 20 per cent owner Alcoa was down 0.6 per cent to $17.01 at the time of writing.