Agreement on Gas to Goldfields pipeline project

14/12/93

After three months of negotiations, the Government and the Goldfields Gas Transmission Joint Venture (GGTJV) have reached agreement about key terms and conditions for the $400 million Gas to the Goldfields pipeline project.

Resources Development Minister Colin Barnett said the consortium, involving Western Mining Corporation, Normandy Poseidon and BHP Minerals, had agreed to a number of conditions including the minimum size of the pipeline and third-party access, as a part of plans to carry gas from the North-West of the State to the Goldfields.

The Minister said the GGTJV's acceptance of the conditions had secured the consortium's role in the project and would allow a State agreement to be drafted and ratified by Parliament in March next year.

Expression of interest bids from two other consortia, the Westralia Gas Pipeline Consortium and AGL/Devex Consortium, have now lapsed after being maintained in case the GGTJV plan did not proceed.

Mr Barnett said the Government had set conditions for the project to ensure the pipeline would service the many new developments which were expected to be triggered by the supply of gas to the Pilbara and the Goldfields regions.

The Minister said conditions about the size of the pipeline would ensure the project would carry enough gas for both the consortium's use and for the future growth of projects in the State.

The agreement surrounding third-party access would ensure other companies had the right to use the pipeline.

As a part of the agreement, the GGTJV would be obligated to provide non-discriminatory third-party access to the pipeline under approved access and tariff arrangements.

It had also been agreed that the pipeline would have at least 50 per cent greater capacity (through compression) than initially required by the consortium and other third-party users who had committed to gas transport.  This would ensure that sufficient spare capacity would be available for growth in the region and for new projects by other companies.

The pipeline would be a minimum size of 400 mm in diameter from its starting point to Newman and at least 350 mm in diameter through to Kalgoorlie.

The consortium would now carry out further detailed planning and field investigations to finalise the pipeline route as well as undertake feasibility studies for the project during the next several months.

Mr Barnett said the project, if detailed feasibility studies proved successful, was expected to be committed during 1994.

Construction of the pipeline was expected to start in 1995 and the first gas supplies to the Pilbara and Goldfields regions were expected by late 1996.

Mr Barnett said the consortium would now be able to complete commercial negotiations with other companies interested in also being involved in the project.  He said the involvement of other companies could allow the capacity of the pipeline to expand.

"It is an exciting project for the State and will be a catalyst for growth in Western Australia," Mr Barnett said.

"The Government is confident about the future of the project and the Goldfields Gas Transmission Joint Venture's ability to carry out what is expected to be the largest infrastructure project for the State during this decade."

Media contact:  Carolyn Vicars 222 9699