DBNGP partners to spend $430m expanding pipeline

THE owners of the Dampier-to-Bunbury Natural Gas Pipeline (DBNGP) - Diversified Utility & Energy Trusts, Alinta and Alcoa - announced a $430m expansion of the pipeline on Friday, committing to the final component of the first major capacity expansion since 2000.

This involves adding eight compressor units and more than 200km of pipeline, which will increase the existing firm capacity of the pipeline by over 100TJ/day. The additional capacity, which is fully contracted, is expected to become available over the next 20 months.

Earlier in the week, Western Australia's Economic Regulation Authority (ERA) abolished the contentious gas specification for the DBNGP. The current specification penalises gas producers whose product does not contain enough LPGs to meet Wesfarmers' needs. This politically driven policy, grandfathered out of Sir Charles Court's government, virtually underwrote the Wesfarmers operation for many years.

The authority said any further delay in adopting a wider gas quality specification was unreasonably contrary to the interests of the general public, gas producers and most pipeline users, and would impede the addition of new sources of supply to the DBNGP. But the ERA did allow DBNGPT a new rate of return of 7.24% on its capital investment.