The decision handed down by the Office of Gas Access Regulation looks set to cut the tariff Alinta pays for the Dampier to Bunbury pipeline by 5%, a ruling that could save Alinta millions and cost Epic Energy, operator of the pipeline, millions.
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The jump follows a three month surge that has seen a 30% growth in the company's share value, around $1.22, following its expansion from a regional gas supplier to a national energy supplier on the back of its deal with AMP Henderson for the Aquila assets.
Prior to the tariff ruling there was speculation of Alinta buying into the pipeline should Epic be forced into administration, a move that raised the alarm bells of the ACCC. However, Friday's ruling by Ken Michael delivered a more than suitable result for the company that will help shield the company against any adverse legislation change concerning its LPG earnings from the Dampier-to-Bunbury gas pipeline.
The earnings from the company's gas stripping deal with Wesfarmers generated $27 million EBITDA in 2002, the possible loss of which can now be diluted by earnings from a variety of other sectors.
The decision on the LPG earnings looks likely to be the only blip on Alinta's 2003/04 radar.
