The company has signed:

• A gas distribution agreement with metal recycling company Smorgon that will see the company at Bell Bay (north of Launceston) connect to Powerco’s network as soon as construction is completed in January.
• A commercial term sheet with aluminum powder manufacturer Ecka Granules to supply natural gas to its Bell Bay plant.
• A Memorandum of Understanding with pharmaceutical processor Tasmanian Alkaloids that will see the company invest in natural gas fired plant and Powerco build the necessary gas infrastructure to connect the company to the transmission pipeline.

The agreements were signed by Powerco Chief Executive Steve Boulton who was in Tasmania this week to deliver a key note address at a national power conference and to meet senior power industry officials and potential customers.

Mr Boulton said he was pleased with the company’s progress to date, in terms of both construction of the stage one network and commercial arrangements with potential customers.

“Discussions with other potential large users are continuing and we are confident of announcing further connections over the coming months,” he said.

In April this year Powerco signed a Development Agreement with the Tasmanian Government to rollout a 100km gas distribution network to more than 20 major industrial and commercial customers in Tasmania.

This project is due for completion by January 2005.

Then in September Powerco and the Tasmanian Government announced a further agreement to extend gas into specified residential and commercial areas within the State making gas available to approximately 38500 smaller gas users.

This phase is scheduled to start before February 2005 and be completed before April 2007.

Mr Boulton said the arrangement with Smorgon meant the Bell Bay network currently under construction would be utilised as soon as it was commissioned.

Smorgon Manager David McGuire said the availability of gas was good news for Smorgon.

“We are pleased to be able to finalise these new contractual arrangements,” he said.

“By changing to natural gas, we will receive two benefits - lower operating costs and the ability to use a more environmentally-efficient fuel.”

Under the Ecka Granules – Powerco deal, Powerco will upgrade Ecka’s metering and connection facility and in doing so make modifications to allow connection to Powerco’s Bell Bay network.

Ecka Granules Managing Director David Williams said the company was looking forward to a long and rewarding relationship with Powerco as Ecka entered a growth phase.

“The proposed modifications to our connection infrastructure enable us to approach our planned expansion program with the confidence of a high reliability gas supply at a competitive price,” he said.

Tasmanian Alkaloids Operations Director Tol Sereda said apart from cost considerations, the use of natural gas as a fuel would improve the company’s environmental performance.

“This agreement provides certainty to both Tasmanian Alkaloids and Powerco, allowing us to place orders for our respective capital equipment requirements,” he said.

“Subject to finalisation of contractual terms with Powerco, we are looking to convert our existing boilers to use natural gas in April next year.”

Detailed planning for construction work on the Tasmanian Alkaloids off-take station and pipeline to its plant will commence immediately.

Mr Boulton said Powerco was working towards construction commencing early in the new year with gas being available to Tasmanian Alkaloids by the end of March.

Mr Boulton said all three arrangements confirmed that the availability of competitively priced gas would contribute to sustainable growth and expansion within the state’s industrial sector.

“The deals endorse our view that we are heading in the right direction as we work to rapidly progress the network construction program and make natural gas available to as many of the larger industrial companies as possible,” he said.