Duet, Alcoa to invest $180m in pipeline

Energy infrastructure investment firm DUET Group and aluminium producer Alcoa of Australia have finalised plans for a $180 million investment in the Dampier Bunbury Pipeline.

Under the agreement between the co-owners, DUET will invest $144 million in the natural gas pipeline, while Alcoa will contribute $36 million over two years, which is less than a previously-estimated 3-5 year period.

“As a result, the size of the total investment is to be reduced from the $200 million previously proposed,” DUET said in a statement.

The company which owns the Dampier Bunbury Pipeline, DBP Transmission, is 80 per cent-owned by DUET, while Alcoa holds the remaining 20 per cent.

As part of the agreement, DUET's share of distributions will increase to 82.1 per cent; however it will then revert back as Alcoa gradually makes its investment.

DUET said it would use proceeds from its recently completed $396.7 million entitlement offer to fund the investment.

The invested funds will also be used to repay debt.

DUET said it would retain the $16 million difference between the original $160 million share of the total investment and the final agreed amount would be retained to fund other investment opportunities.

Shares in DUET were 0.2 per cent lower at $2.45 per share at 12pm.