Alinta plans Pilbara expansion

Alinta Energy has entered into negotiations to supply more Pilbara businesses with electricity following the termination of a long-standing state agreement, which restricted its ability to provide power.

Premier Colin Barnett said the state agreement, entered into in 1993, had served its purpose of developing power infrastructure in the Pilbara and ensuring supply to BHP Billiton Iron Ore, but had become too limiting.

“Until now, the growth of Alinta Energy’s business in the Pilbara has been restricted by this agreement, which had limited further development for purposes not associated with BHP Billiton’s iron ore operations,” Mr Barnett said.

Alinta Energy executive director of power generation Ken Woolley said Alinta had initiated the break-up of the deal in order to facilitate a more competitive energy market in the north-west.

“Alinta Energy welcomes the growth opportunities that being an independent power provider in the Pilbara will provide,” Mr Woolley said.

The termination of the agreement was granted royal assent by Governor Malcolm McCusker today after it passed state parliament last week.

“This allows Alinta Energy to become an independent power provider in the Pilbara by formally separating its business activities from the historical connection to BHP Billiton’s iron ore operations,” Mr Barnett said.

BHP Billiton will now terminate its existing power purchase agreement with Alinta and source electricity from its own newly built on-site generators.

Alinta Energy, which has a 178 megawatt power station in Newman and a 210 MW power station in Port Hedland, said it was in negotiations to supply electricity to several businesses operating in the Pilbara.

Because the state agreement allowed Alinta Energy to supply energy to third parties from existing spare capacity it also has agreements with Fortescue Metals Group and Horizon Power.

Last August it signed a contract to supply electricity to the Roy Hill iron ore project.

Alinta announced today it had awarded engineering firm UGL the contract to construct a 123-kilometre transmission line from its Newman power station to Roy Hill.

UGL began construction on the project two weeks ago.