FORTESCUE RIVER GAS PIPELINE
In January 2014 DDG announced the formation of an unincorporated joint venture named the Fortescue River Gas Pipeline JV (“The Joint Venture”) with TEC Pilbara Pty Ltd (a 100% owned subsidiary of TransAlta Corporation) (TSX: TA; NYSE: TAC).
Its first project was to build, own and operate a natural gas pipeline from the DBNGP to Fortescue Metal Group’s (ASX: FMG, Fortescue) Solomon Hub operations in Western Australia’s Pilbara region.
The 16 inch diameter pipeline, known as the Fortescue River Gas Pipeline, runs from the DBNGP’s compressor station one (CS1) around 150km south of Karratha through to Solomon Hub, a distance of 270 kilometres. The pipeline will initially supply natural gas to the 125MW TransAlta power station which services Fortescue’s mining operations in the region.
At the time of its construction, the Fortescue River Gas Pipeline was the longest gas pipeline built in Western Australia during the past 10 years. A Fortescue subsidiary, FMG Pilbara Pty Ltd, is the foundation shipper on the pipeline under a 20-year, 100% take-or-pay gas transportation contract with the Joint Venture.
The Joint Venture (in which a DDG company, DDG Fortescue River Pty Ltd – has a 57% interest and TransAlta the remaining 43%) combines the natural gas pipeline expertise of DDG with TransAlta’s experience of providing reliable power to remote operations in Western Australia.
Detailed design for the project was undertaken by DDG in late 2013 and early 2014, with land agreements being negotiated and secured with the Kuruma Marthudunera and Yindjibarndi people and other landowners throughout 2014.
The project was offered Lead Agency support from the Department of State Development in March 2014, who supported DDG in coordinating the necessary applications for statutory and regulatory approvals.
DDG engaged Mitsui & Co. (Australia) Ltd to provide a total of 270km of line pipe for the project, which was delivered in August 2014.
Monadelphous KT was engaged for the construction of the Fortescue River Gas Pipeline, with facilities engineering provided by Enerflex.
The Fortescue River Gas Pipeline reached practical completion in March 2015.