Under the agreement, Powerco will assist the Burnie City Council workforce to install gas pipes in the new 4.2 kilometre sewer trench to be dug between the Brickport Road junction at Cooee and the Reeve Street junction at South Burnie.

By June 2004, Powerco is expected to complete installation of stage one of its gas distribution network in the Old Surrey Road area, extending from Mount Road to the Lactose Cheese factory.

Powerco General Manager Corporate Development Jeff Kendrew said Powerco would provide the gas pipes and supervise the installation of the gas pipeline and trenching work by Burnie City Council employees.

"Powerco will also make available to the Burnie City Council machinery required to undertake the joining of pipe sections and provide training for council employees in the use of this machinery," he said.

Kendrew said Powerco was pleased to have signed the heads of agreement that would lead to the expansion of the roll-out of natural gas in the Burnie area.

"The partnership agreement we have signed with the Burnie City Council extends to working cooperatively on the development of a marketing strategy for the promotion of gas in the Burnie area," he said.

Burnie Mayor Alvwyn Boyd said the Council sought the partnership with Powerco to increase the area within the City that would be provided an opportunity to connect to natural gas.

"This is a wonderful outcome for Burnie with a greater gas distribution area being achieved," he said.

"It is this type of leadership and cooperation that is propelling Burnie forward towards a bright and prosperous future.

"Many of our businesses and residential areas will soon be presented with an alternate and competitive energy source that will provide important opportunities for economic and performance gains."

It is proposed that the stage two rollout of the gas pipeline to residential areas at Upper Burnie, Romaine, Brooklyn and Hillcrest will be completed by mid 2007.