Rail freight provider QR National inks a deal with eight coal companies to construct a $900 million export terminal at Gladstone
September 5, 2011
QR National (QRN) has inked a deal with a consortium of eight coal companies including Xstrata Coal, Aquila Resources and Bandanna Energy to construct a $900 million export terminal at Gladstone in Queensland.
Under the agreement
the associated
rail solution will be synchronised with completion of
Stage 1 of the Wiggins Island Coal Export Terminal (WICET) in order
for first coal to be at the port ready for export by mid 2014.
Construction of Stage One will begin in early 2012.
Rail works
undertaken will comprise the
construction of a 13 kilometre balloon loop near Gladstone, upgrades to sections of the North Coast Line, the Moura System and the Bauhinia branch line, as well as duplication of sections of track along the Blackwater System.
Upon completion, the mainline Blackwater System will be fully duplicated.
Bandanna Energy Managing Director Dr Ray Shaw says the Wiggins Island Rail Project (WIRP) agreement
is a very significant milestone both for Bandanna and other Stage 1 shippers.
“QRN’s expenditure of over $900 million for infrastructure is a very strong vote of confidence in
the export terminal
and the shipper’s source mines,” Dr Shaw says.
“This agreement resolves a key piece of the coal supply chain for Bandanna’s Golden Triangle projects.”
With first railings scheduled for mid-2014, the project is expected to align with an initial capacity of 27 million tonnes per annum of coal to the Wiggins Export Terminal at Gladstone.
QR National Managing Director & CEO, Lance Hockridge says the project will contribute to a 30 percent increase in the tonnes transported from the southern Bowen Basin coal region.
“The Wiggins Island Project will be one of the largest rail expansions in Australia,” Hockridge says.
“It represents a significant commitment to the future growth of the Queensland coal industry.”
Hockridge adds the project is the first major rail infrastructure investment by QR National as a privatised entity.
“It underscores our strategy to invest in growth projects in coal,” he says.
“Our priorities are to deliver the right infrastructure for our customers when they need it with world class efficiency, to achieve commercial outcomes for our shareholders and to meet our regulatory obligations.”
Once Queensland Competition Authority approval has been gained and
financial
considerations
related to
the Wiggins Island Coal Export Terminal settled, the project is exected to coincide with the development of several local mining projects.
QR National Executive Vice President and CEO Network Services Michael Carter says the Wiggins Island Rail Project agreement is a major demonstration of network expansion.
“Through consultation and negotiations with our customers, we have been able to agree commercial terms for expanding the rail network to support growing demand for coal exports,” Carter says.
“QR National has substantial expertise at designing and delivering rail infrastructure on its 2,300 kilometre coal network tailored to meet customer demand in line with developments at the mines and Queensland’s major coal ports.
“This investment represents an increase of approximately 20 percent in QR Network’s regulated asset base.”
The Wiggins Island Rail Project is expected to generate up to 3,000 direct and indirect jobs during the construction phase and will draw on the services of many local companies and suppliers.
It will be financed by QR National through existing facilities.
The Wiggins Island Consortium includes Xstrata Coal, Aquila Resources, Bandanna Energy Caledon Resources, Northern Energy Corporation, Yancoal Australia, Wesfarmers Curragh and Cockatoo Coal.
Following Stage One, all remaining works are due for completion by March 2015.