Work has already begun on the A$2 billion expansion of Alcan’s Gove aluminium refinery and Alcan has now committed to buy 44PJ a year of natural gas from the Woodside/Eni JV Blacktip Gas Project over the next 20 years. Production of gas sales is planned to start in late 2007.

The pipeline project involves building a 940km gas pipeline across the north of the Northern Territory to supply Alcan’s alumina refinery.

The 40cm underground pipeline could be part-owned by Aboriginal traditional owners. The Northern Land Council hopes to take an equity stake of up to 40 per cent, worth $250 million, to help boost economic development in impoverished communities.

The office of Federal Aboriginal Affairs Amanda Vanstone has said it would fund a study into the economic benefits of using public funds to finance Aboriginal equity in the project.

It is understood that the pipeline's owners, Alcan, Woodside and the Italian-ENI/Agip, have no objection to Aboriginal equity as long as the deal is structured on commercial terms.

The gas contract is conditional on pipeline arrangements being concluded and the Blacktip Gas Project receiving all joint venture and government approvals by mid-2005.

The formal bidding process for operation and construction of the pipeline begins today with a final decision due in the second quarter of next year.

Potential tenderers had been told Alcan and its partners supported traditional owners taking an equity stake, on commercial terms, according to Woodside.

If final approvals are given, the $1 billion gas project would include the $550 million trans-territory pipeline to Gove and the $450 million Blacktip field development.

The Blacktip field project would include a 110km subsea pipeline to the NT Aboriginal community of Wadeye, an unmanned offshore platform and gas processing plant at Wadeye, according to Woodside's gas and commercial business director David Maxwell.

"The Blacktip gas project lays down important infrastructure that has the capacity to process additional gas from the area and has potential to develop into a regional gas gathering hub," Maxwell said.

Woodside was currently negotiating with other potential gas pipeline customers, including the Northern Territory's Power and Water Corporation, he said.

The pipeline route could also be used to install other infrastructure, such as fibre-optic cable, to give outback Australia access to improved communications, according to Woodside.