Contractors win power work

CIMIC Group subsidiary UGL has been awarded a A$180 million contract by for high-voltage substations and transmission lines that will connect OZ Minerals’ Prominent Hill mine to the South Australian electricity grid.
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Staff reporter

UGL will design, construct and commission voltage switching station infrastructure and approximately 300kms of high voltage transmission lines, building on Thiess' 10-year involvement with the mine.

The project will generate revenue to UGL of approximately $180 million over two years.

"UGL has solid experience delivering high-voltage power substations and transmission projects in some of Australia's more remote regions, including the design and construction of the power line that feeds the Olympic Dam mine site, 550kms northwest of Adelaide," UGL managing director Jason Spears said.

"We are delighted to be working with ElectraNet to deliver power infrastructure that will support the growth of this important business hub, now and into the future."

Meanwhile, Perth-based Pacific Energy was awarded an electricity supply contract by Panoramic Resources for the restarting Savannah nickel mine in Western Australia.

Pacific subsidiary Contract Power Australia will restart its existing 12MW diesel power station from November 1 and immediately upgrade and expand the facility with an additional 2MW of power generation capacity.

In line with the new mine life, the contract has a term of 8.3 years, with the option for Savannah to extend by a further five years.

"We are very happy that Contract Power is playing a key role in the restart of Savannah, continuing the relationship and supporting Panoramic in this exciting new phase of the mine," Pacific MD James Cullen said.

Cullen said that the contract has been constructed with built in flexibility to convert to alternative fuel sources in future, and includes provision for an increase in power generation capacity of at least 4MW in approximately one year, at Panoramic's election.

As a result of the new contract, Pacific Energy's total contracted capacity is now 391MW. Earnings guidance of A$54-55 million of underlying EBITDA remains unchanged as the new contract had been anticipated in the forecast.

CIMIC shares opened 2% lower at $45.07, around the mid-point of the 52-week trading range, while Pacific shares were untraded at 51c.