DBP construction to start next year

The owner of the Dampier to Bunbury natural gas pipeline anticipates construction work as part of the next stage of its $700 million expansion plans, will begin early next year.

Dampier Bunbury Pipeline announced today that all necessary approvals are in process with the company already awarding several contracts for the procurement and construction requirements.

In June, DBP received the all necessary financing and equity commitments for Stage 5B of the project, which involves duplicating several sections of the pipeline. The duplication process, known as looping, started with stages 4 and 5A expansion projects with 787 kilometres already looped.

In Stage 5B, the combined length of the new loops will be some 440km.

Below is the announcement:

Dampier Bunbury Pipeline (DBP) has announced today that all necessary approvals are in process to allow for construction to commence in early 2009 of the Stage 5B Expansion of the Dampier to Bunbury Natural Gas Pipeline (DBNGP).

The bulk of the Stage 5B expansion work involves laying an additional 11 sections of pipeline (in a process known as looping) adjacent to the existing DBNGP. This looping of the DBNGP pipeline commenced with Stages 4 and 5A Expansion Projects, under which 787 kilometres of the DBNGP has already been looped.

The combined length of the new loops for Stage 5B will be approximately 440 kilometres and at the end of this project the pipeline will be duplicated more than 90% to Perth. The expansion will add approximately 112 terajoules per day (TJ/d) to the existing full haul capacity of the DBNGP.

Pipe laying activities are expected to commence in January 2009 on the two loops on the outskirts of Perth. Then work will commence south of Karratha, taking advantage of weather windows. Construction activities are being managed to ensure the availability of a significant portion of the new transmission capacity before the peak summer months of 2009/10.

DBP announced on 4 June that all necessary financing and equity commitments had been obtained and that the anticipated capital cost of the project was approximately $700 million. Since then the following arrangements have been confirmed:

Procurement, Engineering & Construction

DBP has made commitments for all the key procurement and construction requirements for Stage 5B. These include:

- Project Management
As part of its overall asset management arrangements with DBP, WestNet Energy (a division of Alinta Asset Management) will provide project management services for the Stage 5B Expansion Project.

- Supply of Linepipe and Coating Services
This contract has been awarded to Metal One Corporation of Japan (Metal One) with all line pipe required for the project to be manufactured by JFE Steel Corporation in Japan. These companies were responsible for the supply of pipe for the recent Stages 4 and 5A Expansion Projects.
Once manufactured, the pipe will be shipped to Malaysia for coating by PPSC and the coated line pipe will then be shipped to various locations within Western Australia in time to enable construction activities to commence.

- Engineering Services
WorleyParsons Services Pty Ltd will be responsible for the engineering and procurement associated with the project. Additional agreements have been executed with OSD Pty Ltd and other consultants for specific engineering services.

- Pipeline Construction
A contract has been awarded to McConnell Dowell Corporation Ltd - a major international pipelining company with its Australian headquarters in Melbourne - for the construction of the 11 loops. McConnell Dowell has constructed major pipelines across Australia, Asia and the Middle East and has worked on previous projects in WA.

- Compressor Enhancements
Commitments have been made for the bulk of requirements associated with the necessary enhancement works at each of the compressor stations and the expectation is that all will be in place by the end of 2008.