Under the contract with the State Government, Transfield Services will construct, own and operate the peak-load power station after successfully competing against a number of domestic and international power industry participants.
Electricity output of 260 MW from the station will be sold to Western Power under a 25 year power purchase contract, which ensures it will not be exposed to any electricity market risk.
Although designed to supply power at times of peak demand the station is sure to deliver a regular supply to the undermanned WA electricity market, which will push the value of the contract to around $320 million at today's prices.
Construction costs are estimated to be around $250 million with funding to be provided by non-recourse project finance.
Construction work is expected to commence early next year and will include two gas turbines, new sub-station works and gas lateral connection to the Damper to Bunbury natural gas pipeline. Completion and operation date are planned for October 2005 in time for the summer peak demand period in Western Australia.