Another milestone in the construction of Australia’s largest pipeline, the Dampier to Bunbury Natural Gas Pipeline, was achieved last week, with the completion of a $430 million expansion and the official launching of a new phase of development.
Another milestone in the construction of Australia’s largest pipeline, the Dampier to Bunbury Natural Gas Pipeline, was achieved last week, with the completion of a $430 million expansion and the official launching of a new phase of development.
The completed Stage 4 expansion has increased the pipeline’s capacity by more than 100 terajoules per day (TJ/d), while the newly launched Stage 5A is set to cost pipeline owners Dampier Bunbury Pipeline $700 million, and will add 100TJ/d of transmission capacity.
Completion of Stage 5A will bring the pipeline’s total capacity to 800TJ/d, while about 1TJ of gas is sufficient to supply an average home for 50 years.
The pipeline’s expansion will require the laying of 10 loops of additional pipe alongside the mainline, with a combined length in excess of 570 kilometres, and will address increased demand from industry (particularly alumina refinery), electricity generation and domestic gas consumption.
The project will result in about 50 per cent of the pipeline being duplicated.
DBP executive chairman Stuart Hohnen said the state’s rapid economic growth necessitated an expansion of the pipeline.
“Before the purchase of the pipeline by DBP just over two years ago, the DBNGP was facing significant unmet demand, resulting in new projects and project expansions being delayed,” Mr Hohnen said.
“Major industrial projects, estimated to be worth $3.5 billion, are dependent on the completion of the pipeline’s expansion.”
Stage 5A is the first of a proposed three-part expansion program, announced in May last year, and is expected to be completed in the first quarter of 2008.
The total investment by the owners in Stages 4 and 5A is about $1.13 billion, nearly triple the size of the original financial commitment given to the state government and the ACCC. This figure is less, however, than the proposed $1.5 billion, 375TJ/d expansion plan put forward by DBP in February last year.
DBP committed to a $400 million expansion when it purchased the pipeline in October 2004, but significantly increased its commitment to meet demand from shippers.
The proposed $1.5 billion expansion program was subsequently scaled back, after several clients indicated they would be unable to meet deadlines for shipping requirements.
DBP also expressed concerned about volatility in the price of gas and high construction costs for the project.
Investment for Stage 5A was announced in August last year, while Stages 5B and 5C have not been finalised as yet.
Dampier Bunbury Pipeline is the trading name of the group of companies that own the pipeline, comprised of Diversified Utility and Energy Trust, which owns a 60 per cent share, and Alcoa and Alinta, which each hold a 20 per cent share.
Alinta Asset Management is the project manager for the Stage 5A expansion and is responsible for the daily management of the pipeline.
Commissioned to Perth in 1984 and extended to Bunbury the following year, the DBNGP has a mainline length of 1,600km and laterals of about 250km in total.
The pipeline was privatised in 1998, having been purchased by Epic Energy, and was sold to the DBP consortium in October 2004.
Stage 4 was approved in May 2005 and completed in December last year, meeting its budget of $430 million.
The project delivered eight new compressors for the pipeline and 217km of looping.
