30 January 2014
Fortescue Metals Group has signed a long-term gas-transportation agreement for the delivery of gas to reduce operating costs at its Pilbara operations in Western Australia.
Gas will be delivered via the existing Dampier to Bunbury Natural Gas Pipeline (DBNGP) and the new Fortescue River Gas Pipeline to the power station at Fortescue’s Solomon Hub, 60 km north of Tom Price, Western Australia.
The 270 km Fortescue River Gas Pipeline will be built, owned, and operated by the FRGP joint venture, owned by the DBP Development Group, a wholly-owned subsidiary of DUET Group, and TEC Pilbara, a wholly-owned subsidiary of TransAlta Corporation.
Monadelphous Group has been awarded the construction contract for the pipeline, valued at approximately $A100 million, which in turn is expected to save Fortescue approximately $A22.4 million per year, and is set to be operational in early-2015.
Fortescue’s CEO Nev Power said “The pipeline to Solomon allows Fortescue to reduce operating costs and play a significant role in cutting emissions by switching stationary power generation from diesel to clean natural gas.
“The Fortescue River Gas Pipeline also represents a significant step in the gasification of the East Pilbara to the lasting benefit of the state of Western Australia.”
DBNGP owners DUET Group and Alcoa signed a compensation deal with Fortescue Metals Group Chairman Andrew Forrest to enter his Minderoo pastoral lease in Western Australia, proposing to develop the Wheatstone Ashburton West Pipeline, an approximately 110 km buried natural gas pipeline linking Chevron’s Wheatstone Project to the DBNGP.
DBNGP is the only natural gas pipeline connecting the Carnarvon Basin at Western Australia’s North West Shelf with industrial, commercial, and residential customers in Perth and the surrounding region. The pipeline runs from the Burrup Peninsula, near Dampier, to Bunbury in the southwest of the state. The total length of the mainline is 1,596 km, with laterals totalling 258 km. DBP Transmission (DBP), the owner and operator of the project, has long-term transportation contracts in place until at least 2019 with all of the major full-haul gas shippers on the pipeline.
Courtesy of Pipelines International