PWCS T4 running two years late

THE prefeasibility study and option selection phase for Port Waratah Coal Services’ Terminal 4 in Newcastle has revealed that first coal will flow through the terminal by mid-2017 – more than two years later than originally forecast.

Lou Caruana
PWCS T4 running two years late

The tight planning assessment timeframe and the technical complexity of actually building T4 were to blame for the delay, PWCS said in a statement.

PWCS, which won state government endorsement for its T4 over a competing proposal from Nathan Tinkler’s Hunter Ports in January, said at the time it was well advanced into the T4 planning approvals and project development process and that “feasibility, geotechnical and environmental work was also advanced”

PWCS chief executive Hennie Du Plooy said yesterday that subject to planning approvals, PWCS remained committed to delivering Terminal 4 as quickly as possible as per Newcastle’s coal export plan.

“We have met all relevant milestones so far and made significant progress in defining the project and when it can be practically delivered,” he said.

“The new information isn’t a complete surprise, given that the assumed timeframe to move coal through T4 under a best-case scenario has always been extremely tight.

“It is as important as ever that the New South Wales and Commonwealth planning and environmental assessment processes continue as expeditiously as possible.”

Du Plooy said the PWCS board has recently approved additional expenditure of $60 million dollars to progress T4 project studies, engineering and design work.

T4 is a key plank of Newcastle’s coal export plan – the long term commercial framework – which came into effect in January 2010.

Under the LTCF, producers are able to enter into 10-year contracts to secure capacity at PWCS on a take-or-pay basis.

To date, coal producers have entered into contracts totalling 176.7 million tonnes per annum (by 2016), 34 of which are contracted for T4.

This has committed PWCS to further expansions of existing facilities at its Kooragang Terminal and the triggering of T4.

The T4 contract commencement date of January 2015 was based on a four year lead time written into the LTCF agreements.

“The LTCF agreements foreshadow that the project schedule may change and, accordingly, contain a review clause,” PWCS said.

The agreements also contain provisions that allow producers to transfer loader allocations amongst each other, meaning producers can increase or decrease their capacity requirements – depending on their circumstances – by swapping tonnage.

PWCS has committed nearly $2 billion to loader expansions over the past 12 years and currently has nameplate capacity of 133Mtpa.

It expects to reach its maximum planning-approved capacity of 145Mtpa by January 2013.

In the 2012 calendar year, PWCS expected to load approximately 110Mt onto export vessels, highlighting that terminal capacity remained ahead of overall coal chain capacity – even before the delivery of T4, PWCS said.

Hunter Valley rail track capacity will not be available to service the new terminal by early 2015.


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