AUSTRALIA

WA pipeline network set to expand

A NEW 220km gas pipeline from the Eastern Gas pipeline potentially helping unlock the new Yamarna mineral province seems more certain after explorer Gold Road Resources kicked off the environmental approvals process to develop the pipeline to fuel its massive Gruyere gold mine development north east of Laverton.

WA pipeline network set to expand

Western Australia's Environmental Protection Authority yesterday opened the public comment period as part of its assessment of the proposed pipeline route.

At this initial stage of the EPA process, comment is simply sought on whether or not the EPA should assess a proposal and, if so, what level of assessment is considered appropriate.

The West Perth-based Gold Road wants to create a spur line from APA Group's existing Eastern Goldfields gas pipeline just south of Laverton to carry gas to power a proposed 40 megawatt power plant at Gruyere's

The Gruyere Gas Pipeline Project involves the construction of the pipeline and associated infrastructure including a permanent access track that runs the full 220 km length of the pipeline, a delivery/meter station, a gas off-take and treatment station, a main line valve, upstream compressor station and temporary construction camp for construction personnel.

As the high pressure gas pipeline will be buried, the majority of the environmental disturbance will be rehabilitated following initial construction.

The pipeline will take one of two routes from the existing pipeline about 2km south of Laverton, and then run for 170km to the mine within the White Cliffs Road reserve.

The power plant will support the massive 7.5 million tonne per annum processing plant required to help develop the mine.

The $455 million project is expected to average 265,000oz of gold a year over an initial 12 year mine life, at average all-in sustaining costs of $960/oz.

The mine life is expected to be 12 years, however Yamarna is an emerging world class district with a potential endowment of at least 20Moz. It could be that there are multiple plants in the years that follow the initial development.

Gold production is expected by the end of 2018 with project payback in 42 months.

When Gold Road announced its plans to favour gas over the earlier diesel option considered to support a smaller 5MMtpa CIL plant, but the pipeline emerged as an option in August when the first stage of the pre-feasibility was announced, and was formally selected with the final pre-feasibility study's completion in March.

It was decided that given the size of the project, gas was considered a better option as it would eliminate the need to transport large volumes of diesel along unsealed roads and the associated risks that come with that.

The power plant will still have standby dual fuel power generation capability.

The company recently completed a $75 million capital raising and expects to finalise its tendering process shortly.

It said it would look to develop the pipeline off its own books, through a build-own-operate agreement with an existing pipeline provider.

Contact award to the pipeline provider is expected this quarter, with construction expected to begin in mid-2017, with first gas to the power station expected in the second quarter of 2018.

Construction is anticipated to be progressive during the six month construction period, with starting points at Laverton and Gruyere, and one possible team to commence midway between the two, to facilitate project completion on schedule.

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