Alcoa’s Contribution to Energy Infrastructure

In 2007, Alcoa and Arc Energy entered into a natural gas sales contract for the delivery of up to 500 petajoules of natural gas to Alcoa during a 15-year period.  This Agreement was transferred to Buru Energy following its demerger from Arc Energy in August 2008. As part of this arrangement, Alcoa provided a AU$40 million pre-payment to Buru; subsequently AU$20 million was placed into an escrow account.

In August 2013 Alcoa agreed to release up to AU$20 million from the escrow to Buru Energy to develop natural gas supplies from the Canning Basin. This will fund the appraisal program for the Laurel wet gas accumulation.  Read more about Buru Energy 

Alcoa’s contribution of $25 million into a joint venture operated by Empire Oil and Gas has already paid dividends. In June 2013, Alcoa celebrated gas flowing for the first time from the Red Gully gas plant, near Gingin in Western Australia, to its three WA alumina refineries.

The Red Gully gas plant is the first integrated condensate and gas processing plant in the Perth Basin. In addition to current operations, Empire has identified further exploration plans aimed at increasing reserves and expanding its market position.  Although long-term natural gas supplies in Western Australia still need to be considered, this project is an excellent example of how innovative thinking can deliver sustainable results.

In 2008, Alcoa formed an agreement with Latent Petroleum Limited (now Transerv Energy), a joint venture which has the potential to change the energy supply landscape in Western Australia.  Together we are appraising and developing the Warro Gas Field north of Perth.  The field is located onshore, close to existing gas pipeline infrastructure.  If successful, this will be Western Australia’s first commercial tight gas field, promoting the development of other tight gas fields in the state. Read more about Warro  

These ventures build on Alcoa’s long history of underpinning energy infrastructure in Western Australia and Victoria. Thirty years ago, Alcoa and the WA State Government partnered to underwrite a long term contract and the funding of the Dampier to Bunbury Gas Pipeline to enable development of the North West Shelf gas project. The pipeline continues to deliver energy supplies to businesses and communities in the South West of WA.
 
Today, Alcoa is a 20% owner of Dampier to Bunbury Natural Gas Pipeline. The State sold the pipeline for $2.4 billion in 1998. In 2004, Alcoa and our consortium partners spent $1.9 billion to rescue the pipeline out of receivership in order to secure its expansion. The consortium spent a further $1.8 billion expanding the pipeline since May 2005. In August 2013, the pipeline had been duplicated approximately about 83% of its length - this is a second pipeline running parallel to the existing asset. Read more about the pipeline  

In Victoria, we reduce the amount of power we take from the Victorian grid by creating our own energy to supply the Point Henry aluminium smelter in Geelong.  We run a brown coal mine and power station in Anglesea which produces around 40% of the energy needs for the Point Henry smelter.
 
Just as Alcoa’s support of the development of the Dampier to Bunbury Gas Pipeline resulted in providing power to homes and businesses in Western Australia, Alcoa’s construction of the Portland Aluminium Smelter in the 1980s was used by the Victorian State Government as the basis for developing the Loy Yang complex, which brought a large number of jobs to regional Victoria. 
 
The creation of Portland Aluminium was also the catalyst for the construction of a high voltage line from Geelong to Portland and an interstate interconnector between Victoria and South Australia.  Connecting South Australia to the Victorian grid has enabled South Australians to access a more stable and reliable power supply. 
 
In addition, Portland Aluminium supported construction of a pipeline delivering natural gas to Portland and surrounding communities.