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Alinta agrees to build Arrow power plant

ITS been a busy week for Arrow Energy. The company has signed yet another deal, this time with Al...

Announced yesterday, this move follows Arrow’s agreement on Monday with NSW government-owned Country Energy to purchase the power station’s output and a farm-out to Beach Petroleum on Tuesday to complete funding for stage one of the Tipton West scheme.

The heads of agreement provides for Alinta to build, own and operate the $34 million power station as part of the Daandine Generation Project until completion of the 15-year term, after which it must transfer ownership to Arrow.

Financial close of the power station and gas field development is expected by next month, with first electricity expected to be sold into the National Electricity Market grid by August next year.

Arrow said this agreement transferred the key risks of power generation to Alinta – a company “most appropriately positioned to mitigate these risks.”

To be fuelled by coalbed methane from Arrow’s 100%-owned Daandine field, the project is on tenement PLA 230 – immediately south of the Kogan North project and co-located with the Kogan North Gas compression facilities.

Arrow said the Daandine Generation Project was part of a strategy to create its own markets, both to supplement large foundation gas sales contracts and to provide early cash flow from discoveries.

It also said the project could be replicated throughout Queensland and NSW where Arrow holds extensive CBM leases, including undeveloped discoveries.

Alinta Limited is an infrastructure company that operates over 20,000km of gas pipelines and 12,000km of electricity lines in Western Australia, Queensland and Victoria. Their network is made up of 1.1 million gas and 583,000 electricity connections.

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