25/03/2010 - 00:00

Oakajee leads congested field of port plans

25/03/2010 - 00:00

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INVESTMENT in new port capacity is a top priority for private industry and government if Western Australia is to avoid the bottlenecks restricting east coast exporters.

Oakajee leads congested field of port plans

INVESTMENT in new port capacity is a top priority for private industry and government if Western Australia is to avoid the bottlenecks restricting east coast exporters.

Leading the pack of proposed developments is the $4 billion Oakajee integrated port and rail project north of Geraldton, backed by a $678 million commitment from the state and federal governments, which is rapidly advancing toward a construction start next year in a bid to commence exports in early 2014.

Oakajee Port & Rail chief executive John Langoulant likened the project to the construction of the Goldfields water pipeline in terms of its significance to the WA economy.

“What you’re doing is opening up a whole new iron ore province for the state and ... access to international markets for a range of other products,” Mr Langoulant said.

“And in time, the exciting part is you can actually envisage the rail system linking in to the east-west (interstate) rail system.

“So there are many opportunities which emerge from that point of view.”

OPR has already confirmed a 30 per cent increase in the port’s initial capacity, to 45 million tonnes per annum, based on the requirements of its three foundation customers, while the state government believes capacity could ultimately exceed 100mtpa.

Coming up behind Oakajee is a proposed $1 billion deepening of the inner harbour at Port Hedland to increased iron ore exports from new producers from about 2013, for which the state government has sought funding from Infrastructure Australia.

The deepening will support private investment by a number of iron ore groups at Port Hedland, including: the $2.1 billion South West Creek facility planned by the North West Iron Ore Alliance; Hancock Prospecting’s proposed Stanley Point berth; and a further expansion of Fortescue Metals Group’s port facilities.

Mining giants BHP Billiton and Rio Tinto are also privately investing billions to expand their Pilbara port capacity.

The state government has also publicly endorsed a planned new iron ore port at Anketell Point, north-east of Karratha, and has requested federal funds for a proposed $550 million LNG supply base at Derby to support offshore gas development in the Browse Basin.

But it is also investing heavily to upgrade existing port capacity in the near term, allocating more than $370 million to major port works this financial year alone.

The bulk of that funding will be devoted to two major projects, jointly worth more than $500 million when they are completed.

The most advanced is a three-year program to construct a new multi-user bulk commodities wharf at Utah Point at Port Hedland, which will allow small-scale miners to export about 17mt of iron ore, manganese and copper annually from late this year.

When construction began in 2008, the project was expected to cost a total of $228 million. However, construction delays resulted in the government allocating an extra $33 million to the project last December in a bid to ensure the facility is complete by October 2010.

Closer to home, the Fremantle Port Authority began a controversial $250 million dredging program at Fremantle’s inner harbour in January that should be complete by the end of the year.

The project is Fremantle Port’s (pictured) most significant upgrade in decades and will enable it to receive bigger ships at full load. The work includes the reclamation of 27 hectares of land for port use at Rous Head and an upgrade of berths 9 and 10 at North Quay.

However, based on the projected growth in trade, Fremantle port is still expected to hit full capacity around 2017, making the development of “outer harbour” facilities vital to meet long-term needs.

Yet uncertainty hangs over the two main proposals to address the region’s long-term port needs: the Len Buckeridge-backed $144 million James Point bulk materials berth at Kwinana; and Fremantle Port Authority’s adjacent Kwinana Quay ‘island’ proposal.

Both are waiting on Transport Minister Simon O’Brien’s response to a confidential report prepared by the Fremantle Ports Optimum Planning Group, which was established last April to develop a long-term strategy for port development.

The minister’s office confirmed the report had been received, but declined to indicate when the government will announce its response.

Nonetheless, James Point chairman Chris Whitaker said his group remained confident it could achieve all final approvals in time to start construction by mid next year, and commence operations in late 2012.

“Certainly the level of interest from prospective users is very high and keen to see it moving, and we are part way through the process of selecting an operator,” Mr Whitaker told WA Business News.

“The only other part of the jigsaw is getting all the necessary approvals from government ... and we are in the throes of those discussions now.

“The joint venture is very keen to get moving and so are the prospective customers.”

A spokeswoman for the FPA said its own long-term planning continued but would depend on the minister’s assessment of the planning group’s report.

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