• The company has signed a Memorandum Of Understanding with leading Australian dairy manufacturer Bonlac Foods Limited (BFL).
  Vegetable processor Simplot has announced it is finalising arrangements with Powerco and intends to convert their Quioba site to natural gas.
• Malt manufacturer Joe White Maltings has also reached an agreement with Powerco which will see the company’s Quioba based plant connect to natural gas as soon as Powerco’s network in Devonport is commissioned.
• Hobart business Blueline Laundry has also announced that it has signed a distribution agreement with Powerco.
• The announcements coincided with a visit to Tasmania by Powerco’s Board to view progress at a range of gas network construction sites, and to meet senior Tasmanian Government representatives and energy industry senior executives.

Powerco signed two agreements with the Tasmanian Government in 2003 to rollout gas distribution networks to various parts of the State.

Powerco Chairman Barry Upson said the company was delighted with progress and the response of large commercial and industrial customers interested in exploring the benefits of natural gas to their operations.

Powerco Chief Executive Steven Boulton said that Powerco now had customer commitments in excess of 400Terrajoules per annum.

"We are in the advanced stage of discussions with other large commercial and industrial users and expect interest in connecting to gas to continue as the backbone pipeline networks are built," he said.

"We are confident of securing further industrial and commercial connections over the coming months which means our network currently under construction would be utilised immediately upon being commissioned."

Mr Boulton said the customer arrangements announced today confirmed that the availability of competitively priced natural gas would contribute to sustainable growth and expansion within Tasmania’s industrial and commercial sectors, contributing to overall growth of the State economy.

"The agreements support our view that our investment has been prudent as we rollout the network construction program and make natural gas available to as many of the larger industrial companies as possible," he said.

"We remain on our business plan targets with our pipeline rollout both in conformance to budget and kilometres installed."

Powerco expects to commission the Longford gas network before the end of March 2004 and Bell Bay network by 5 April 2004.

Powerco also recently announced it had commenced network rollout in Launceston and Devonport and has been installing gas pipe in Hobart since late January.

These backbone networks are planned to be completed by December 2004.

For further details contact

Steve Boulton
Chief Executive
0274 419 393

Powerco Investment in Tasmania – Brief Overview

In April 2003 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.

In September 2003 Powerco and the Tasmanian Government announced the signing of a further agreement to extend gas rollouts into specified residential and commercial areas within the State, making gas available to approximately 38500 gas users. The rollout will be more than 600 kilometres in length. This phase is scheduled to start before February 2005 and be completed before April 2007.

The Tasmanian investment environment provides a number of upside benefits not available in New Zealand, including:

• The long-term availability of natural gas - known reserves of accessible gas are sufficient for more than 100 years of supply to consumers
• No price, profit or revenue regulations – the State does not regulate the providers of gas networks, preferring to focus on encouraging infrastructure investment and economic development
• Franchise coverage – limited franchise protection is provided for certain gas networks to reduce risk associated with long-term infrastructure investments
• Financial support – the Government provides up-front capital funding contributions to support infrastructure investment, further levering economic development, energy options and value for consumers.