Last year, the government-owned energy supplier, Enertrade, was selected as preferred developer for a gas-fired power station to increase baseload electricity supplies to North Queensland.
Under the deal, Transfield will convert its current 159 megawatt oil-fired peaking plant to a 220 megawatt gas-fired combined cycle facility. About 290 petajoules of coalbed methane will be delivered to the Yabulu plant over 15 years, beginning in 2005.
The December deadline was regarded as essential so that the plant would begin operating on time, with pipeline construction scheduled to begin next week.
In other Yabulu news, it is expected that by the end of the month BHP Billiton will announce whether it would buy 50% of CH4, the Macquarie Bank offshoot that Enertrade had partnered to bring CBM at Moranbah through a 391km pipeline to Yabulu.
