Dampier Bunbury Pipeline (DBP) said this afternoon that it had received requests from major industrial customers for roughly 375 TJ/day of new capacity for the period from late 2007 to 2009.

To meet this increasing demand – which has come more than 10 years ahead of initial projections - DBP would need to construct approximately an additional 1150km of new pipeline alongside the existing pipe at an estimated cost of about $1.5 billion.

Combined with the current $433 million Stage 4 expansion, the Stage 5 expansion would effectively duplicate 90% of the length of Australia’s largest pipeline.

The size and estimated cost of the proposed Stage 5 expansion are to be revealed in an application to be lodged shortly with Western Australia’s Economic Regulation Authority (ERA).

The application seeks the ERA’s pre-approval of the capital costs of the Stage 5 expansion so that DBP can secure a final commitment to the financing of the Stage 5 expansion.

DBP was working on an extremely tight deadline and the ERA’s independent evaluation of the capital costs of Stage 5 would assure customers that all costs had been properly reviewed, according to DBP executive chairman Stuart Hohnen.

“The Stage 5 expansion will provide the backbone for future electricity generation, industrial growth and domestic gas consumption in Western Australia,” Hohnen said.

“DBP needs to secure all the necessary regulatory, finance and internal approvals before the expansion can proceed. These approvals will be required by the middle of 2006 to be able to expand the pipeline in time to meet the first requests for extra capacity.”

DBP had also begun negotiating with shippers on amendments to the standard shipper contracts which were also necessary to enable the Stage 5 expansion to proceed, according to Hohnen.

DBP is hoping to secure ERA approval and renegotiated contracts with customers in time for a final Board commitment to the funding of the Stage 5 expansion by the middle of this year.

Work would then begin on expanding the pipeline to meet the first demands for extra capacity.

The Stage 5 expansion will involve up to 900 construction jobs in activities including civil works, accommodation, catering, communications, transport, freight forwarding, warehousing and security.

The local content is expected to be around 65-70% of the total project.

Dampier Bunbury Pipeline is the trading name of the DBNGP group of companies, ultimately owned by the consortium that purchased the Dampier to Bunbury Natural Gas Pipeline in October 2004. DBP is majority owned by DUET – Diversified Utility and Energy Trusts - with Alcoa and Alinta minority owners.