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Port Campbell underground gas storage developer chosen
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Texas Utilities Australia is to build, own and operate the proposed underground gas storage project at Port Campbell in Western Victoria.
The UGS project is a major part of the Government's strategy to improve the security of the Victorian network providing another source of gas during peak demand.
The State will receive $24 million in net proceeds from TUA, which is expected to start construction next month and commence operations by next winter.
Gas will be delivered to the State network through a new 152-km South West Pipeline to be managed by the State Government-owned Transmission Pipelines Australia (TPA). Construction of the South-West pipeline is also expected to start next month.
The UGS will use existing depleted gas reservoirs in underground rock structures to store natural gas, injected into storage during summer when there is less demand and withdrawn during periods of high demand in the winter months.
The Government advertised for expressions of interest for private sector development and operation of the UGS project.
TUA approached the government with an offer to acquire the UGS development and take responsibility for its completion.
The Government also held confidential discussions with one other interested party.
"The Government concluded the TUA proposal was superior in terms of cost, best met the objective of transferring risk from the State and offered appropriate technical expertise," the Treasurer, Mr Stockdale said.
TUA has been owner of the electricity distribution business Eastern Energy since 1995 and involved in gas reticulation in Gippsland.
The company is a wholly owned subsidiary of Texas Utilities Company based in Dallas, Texas, which operates ten natural gas storage facilities and is one of the largest natural gas distribution and pipeline companies in the US.
TUA will be required to satisfy peak day deliverability obligations for winter 1999 and meet shortfalls when peak deliverability arrangements expired in 2001.