19/12/2016 - 10:49

Gas pipeline owner to build storage facility

19/12/2016 - 10:49

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A $69 million gas storage facility will be built near Onslow by Duet Group subsidiary DBP Development Group to help producers and consumers smooth production profiles and cover planned outages.

Gas pipeline owner to build storage facility
The new storage facility will be located near Wheatstone's domgas plant.

A $69 million gas storage facility will be built near Onslow by Duet Group subsidiary DBP Development Group to help producers and consumers smooth production profiles and cover planned outages.

The plant will be capable of holding around 42 petajoules of gas.

To put that in context, that’s about six weeks of Western Australia’s total domestic demand, although the facility won’t be capable of withdrawing gas to supply more than about 5 per cent of daily usage.

The plant is expected to be operational by June 2017, with magnetite producer CITIC Pacific Mining signing up as the foundation customer with a ten year storage agreement.

Other contracts are under negotiation.

About $38 million of the plant’s cost will be funded by DBP’s working capital, while the remainder will come from a bank debt facility.

The facility will be at the Tubridgi onshore gas reservoir, near to the Chevron-operated Wheatstone and BHP- operated Macedon domestic gas plants.

An existing transmission line will connect the facility to the DBP owned Dampier to Bunbury Natural Gas Pipeline.

There’s one existing storage facility connected into the state’s gas system, APA Group’s 18 petajoule Mondarra facility, located South of Geraldton.

DBP chief executive officer Stuart Johnston said the new facility would allow parties to bank unused gas, smooth production profiles or store gas to cover planned outages.

“In developing the project to this stage we are very pleased with the support we received from the traditional owners, the Thalanyji people and local landowners,” Mr Johnston said.

“Support from government agencies, particularly the Department of Mines and Petroleum, has also enabled DBP to quickly progress to a final investment decision.”

Citic chief executive officer Chen Zeng said the company was underpinning critical infrastructure projects in Western Australia.

“A reliable, cost-effective energy supply is very important for our project,” Mr Zheng said.

“The Tubridgi storage facility will greatly assist us in managing our operational requirements for energy over the long term.”

It comes a week after DBP’s listed  owner Duet announced Hong Kong-based Cheung Kong Infrastructure had launched an acquisition bid valuing Duet at $3 per share, or more than $7 billion.

Shares in Duet Group were down 0.4 per cent to $2.79 each at the time of writing.

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