The unit was due to be commissioned this month but will not come online until early August when electricity will be intermittently supplied into the grid. Full production is not expected until October, according to Alinta.

But the company said it had arranged to ensure all its new electricity customers are supplied with power from today in accordance with their contracts.

In other news, Alinta and Wesfarmers yesterday announced alterations to their supply agreement for Wesfarmers LPG’s extraction plant in Kwinana.

The Wesfarmer's plant has been operating since August 1988 with Alinta, and its predecessors, supplying 100% of the feedstock and fuel gas requirements.

The altered arrangements with Wesfarmers give it continued firm transportation capacity and exclusive LPG extraction rights to gas in the pipeline over the next 10 years, Alinta said.

The agreement has no end date but provisions allow either party to terminate by giving 12-months notice after the initial decade, or in the event the project ever ceased to be economically viable, the company said.

After today, producers are no longer required to deliver gas with a minimum LPG content into the pipeline and the LPG content delivered by Alinta to Wesfarmers’ plant is likely to fall.

But Alinta said it expected the LPG content would remain high enough to underpin the extraction plant’s operation for some years, after which additional LPG supplies may need to be obtained from existing and new gas producers.

The arrangements have been structured to ensure Wesfarmers could negotiate with producers to enhance the LPG content of gas in the DBNGP, Wesfarmers Energy managing director David Robb said.

The arrangements provided a long-term basis for the company to continue optimising production from its Kwinana LPG plant, according to Robb.

“Importantly, these arrangements are expected to underpin ongoing domestic supply of LPG to the Western Australian market, thus avoiding the need for significant imports.”

In 2004, Alinta reported EBITDA from this gas sales agreement with Wesfarmers of $30.2 million.

It had previously advised the market it expected annualised earnings from this contract to fall to around 30% after June 30 this year.

In the 12 months from today, the EBITDA from the amended agreement is expected to be $15 million, split evenly over the year, Alinta said.

Through other agreement changes, Alinta’s exposure to variations in world LPG prices and to currency exchange rates will be partly reduced, it claimed.