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Alcoa’s Contribution to Energy Infrastructure
In 2008, Alcoa formed a joint venture with Latent Petroleum Limited, a partnership 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, the project will promote development of other tight gas fields in WA and open a new source of supply.
This latest venture builds on Alcoa’s long history of underpinning energy infrastructure in Western Australia and Victoria. 25 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.
Alcoa derived no benefit when the State sold the pipeline for $2.4 billion in 1998. The pipeline has delivered stable, low-cost energy supplies to businesses and communities in the South West of WA.
Alcoa is a 20% owner of Dampier to Bunbury Natural Gas Pipeline. 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 has committed a further $1.8 billion to expanding the pipeline since May 2005.
The pipeline has already been duplicated for about 50% of its length. The Stage 5B Expansion Project will mean that the pipeline will be duplicated for 75-80% of its length by mid 2010. Expansion of the pipeline enables further development in WA by meeting existing and future demand for energy.
In 2007, Alcoa entered into an agreement with ARC Energy in which Alcoa pre-paid $40 million to support ARC Energy’s gas exploration program in the Canning Basin. This Agreement was transferred to Buru Energy following its demerger from Arc Energy in August 2008.
In Victoria, we reduce the 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 that is then used by 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 Portland Aluminium 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. This has allowed Victorian industry and households to enjoy the economic benefits of low energy prices.
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.
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