Wesfarmers has budgeted up to $138 million to construct a 175 tonne per day (64,000 tonne per annum) LNG plant at Kwinana, south of Perth, as well as associated distribution infrastructure and two remote power stations to produce a vertically integrated energy project.

“LNG is an alternative fuel to diesel,” Wesfarmers said.

“The production plant will significantly expand LNG’s availability in Western Australia as a fuel for the heavy-duty vehicle, industrial gas and remote power generation markets.”

Wesfarmers has concluded long-term gas supply and pipeline access arrangements with Santos and Dampier-Bunbury Pipeline.

Wesfarmers Energy managing director Tim Bult said a large proportion of the plant’s future LNG production had been contracted for remote power generation to AngloGold Ashanti’s Sunrise Dam and Barrick’s Darlot gold mines, and to Western Australian-based heavy-duty vehicle customers.

The company said it is satisfied it has proved the commercialisation of LNG for the domestic market by operating up to 70 trucks running on LNG, which collectively travelled more than 12 million kilometres throughout Australia.

“We see the potential to further expand our LNG network elsewhere in Australia,” Bult said.

“Development work to date has included demonstrating the product, understanding customer requirements, assessing supply locations and demand requirements.”