UNITED Utilities Australia is hoping to be a larger part of the bicentennial celebrations of piped water to the Goldfields than it was of the 100-year anniversary, which honoured CY O’Connor’s vision to deliver water from Perth.
At last week’s ceremonies, the company’s chance to provide a second pipeline into the region, this one from Esperance, was confirmed with the announcement United Utilities Australia’s proposal would get a second hearing from the WA Government.
Last year’s Goldfields Esperance region water supply strategy report not only concluded there was sufficient water for the near term, but suggested United Utilities Australia’s proposal to use desalinated water from Esperance was not an economic option.
“Now’s our chance to prove we can deliver high quality water to the main street of Kalgoorlie at a very good price,” United Utilities Australia managing director Graham Dooley said.
Mr Dooley said the original proposal was analysed on relatively conservative engineering perspectives, but the company believes its finance, construction and energy supply plans will deliver a competitive economic edge.
With this in mind, United Utilities has remained in discussion with the WA Government and agencies since the report was released less than six months ago.
Increasing concerns within the Premier’s Water Taskforce about the extent of drought, and a visit by Goldfields Esperance Minister Nick Griffiths to BHP Billiton subsidiary QNI’s Yabulu nickel refinery in northern Queensland, are thought to also have assisted United Utilities’ cause.
At Yabulu, United Utilities is converting the salt water waste into fresh water and returning it to QNI, in reportedly difficult circumstances, but using a relatively simple plant operation.
“This has not been the normal solution you would get from a consulting engineer, but United Utilities is ambitious,” Mr Dooley said.
For the Esperance proposal, United Utilities plans to achieve some of its economies from a Burns & Roe Worley power station.
Unitied Utilities can cut energy costs by desalinating water that is already warm, coming out of the power station.
The company’s costs for carbon dioxide – to be put in the water to prevent it corroding pipes – will also be lower, as that too will come from the same plant.
As its parent company already does in the United Kingdom, United Utilities Australia hopes to provide additional power for its operations from installing its own wind turbines.
And unlike the first long distance water pipeline into Kalgoorlie, United’s proposed 500 kilometre line will be constructed of high strength, and relatively light, steel.
Hence, the pipeline will be able to withstand greater pressure, enabling greater volumes of water to be pumped through the line.
With a requirement for more than 100,000 tonnes of this high-strength steel United Utilities is also confident of attracting the best prices from the world’s largest steel mills.
Construction costs will also be contained with the digging of a shallower trench than has been the convention in other locations.
The $400 million to $500 mill-ion project finance is expected to come from a mix of shareholder support and low-cost debt.
Two major banks have already gone on record saying they could provide loan funds on long terms for stable rates, close to current mortgage rates, Mr Dooley said.
Another large financial insti-tution has said it can provide share-holders to the tune of $200 million.
This finance is expected to come out of Australia.
“Australia is awash in cash out of the superannuation industry,” Mr Dooley said. “Funds are looking for long-term stable businesses that will provide a steady return, and the demand for water into the future is constant.”
United Utilities Australia has also been talking with BHP Billiton over the past year concerning the proposed Ravensthorpe nickel operation and could end up with two separate desalination plants in the southern region, or a pipeline going west from Esperance.
Opportunities to supply agribusiness west of Esperance, and along the Esperance-Kalgoorlie route, in addition to regional mining operations extending north of Kalgoorlie and taking in the nickel sector and the gold industry, will also be analysed carefully in coming months.
“There is a can-do attitude in the WA Government,” Mr Dooley said.
“The Government will be looking to confirm all assumptions, and to carefully determine who will buy how much water and at what price, to determine once and for all if this is a goer.
“And if it’s not, then let’s drop it. But this could be a major step forward for large-scale desalination in Australia.
“If it is viable – and our analysis suggests it is – we are looking forward to working with the Government to make it happen.
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