TransAlta establishes Joint Venture to construct a natural gas pipeline in Western Australia

TransAlta Corporation announced that it, through a wholly owned subsidiary entity (TEC Pilbara), has formed an unincorporated joint venture with DBP Development Group (DDG), a wholly owned subsidiary of DUET Group. The joint venture is called the Fortescue River Gas Pipeline Joint Venture and its first project will be to build, own, and operate a $178 million natural gas pipeline from the Dampier to Bunbury Natural Gas Pipeline to TransAlta’s 125 MW dual-fuel power station at Fortescue Metals Group’s Solomon Hub. TransAlta has a 43% interest in the joint venture. « TransAlta’s business in Western Australia is focused on providing reliable, low cost power to its customers in the remote mining regions of the State, » said Dawn Farrell, President and Chief Executive Officer of TransAlta. « This joint venture brings together the strengths of two companies with extensive experience in Western Australia to provide lower costs and a key piece of energy infrastructure to Fortescue. The investment also provides an opportunity for future expansion in the Pilbara region and is consistent with TransAlta’s strategy of growing in its core regions and diversifying its cash flows. » The Fortescue River Gas Pipeline is expected to be operational in early 2015, with construction of the 270 kilometer 16-inch pipeline to begin in July 2014. Once completed, the pipeline will supply natural gas to the TransAlta power station, which services Fortescue Metals Group’s mining operations at the Solomon Hub. It will be the longest gas pipeline built in Western Australia during the past 10 years. The pipeline is contracted to Fortescue under a 20 year agreement. Western Australia is an important market for TransAlta, where it has been operating for more than 15 years. With six facilities totaling 425 MW of generating capacity, TransAlta has proven experience for providing reliable power to remote operations in the region.