Wiggins Island Coal Terminal

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Wiggins Island Coal Export Terminal (WICET) is a new coal export terminal at the Port of Gladstone in Queensland, Australia. It opened in April 2015, after three years of construction.[1]

WICET has applied to increase the port's initial operating capacity of 27 million tonnes to 84 million tonnes.[2]

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Background

The terminal was originally proposed in 2010 by Wiggins Island Coal Export Terminal Pty Ltd, a consortium of coal companies. The US$3.3 billion project led by Glencore Xstrata (a division of Glencore International) had an anticipated completion date of 2015.[3]

At the end of September 2010 the WICET consortium announced that eight coal companies had made commitments to export 27 million tonnes of coal, which would be sufficient to enable the funding of the first stage of the terminal. The consortium stated that it expected that financing the proposal would be completed early in 2011 and shipments commence in 2014.[4]

In October 2013, Bloomberg reported that the terminal would likely only operate at half its anticipated 27 million tonne capacity due to slumping coal demand,[5] and in April 2014 energy policy news site RenewEconomy.com expressed skepticism about the project's financial viability in light of record low coal prices and a strong Australian dollar.[3]

In October 2014, the Sydney Morning Herald reported that the terminal had experienced delays due to cost disputes with contractors.[6] However, John Massey, chairman of the WICET consortium, stated in November 2014 that the project would be completed in March 2015, despite these challenges.[7]

The terminal opened in April 2015 with a capacity of 27 million tonnes per annum (mtpa).[1] The Australia Coordinator-General extended the currency period for the EIS Evaluation Report for the proposed expansion to 84 mtpa from 7 January 2014 to 7 January 2016.[8]

Ownership

WICET’s first stage is owned by a consortium of eight Australian and international coal companies:[9]

  1. Aquila Resources
  2. Bandanna Energy
  3. Caledon Coal
  4. Cockatoo Coal
  5. Glencore
  6. New Hope Group
  7. Wesfarmers Curragh
  8. Yancoal

The eight partners had agreed to pay port fees for 27 million tonnes whether they shipped that volume or not - setting themselves a tonnage charge as much as five-times higher than other coal ports. In March 2016 Reuters reported that low coal prices had pushed two of WICET's original owners, Cockatoo Coal (COK.AX) and Bandanna Energy BNG.AX, into administration. With the collapse of the two companies the remaining partners have to cover the cost of the unused capacity. Glencore and the five other coal companies are facing an extra US$114 million a year in costs.[10]

Impact on Barney Point Coal Terminal

In April 2010 it was announced that The Australian Competition and Consumer Commission (ACCC) authorized arrangements to transfer specified amounts of coal handling capacity from the Barney Point Coal Terminal to the proposed Wiggins Island terminal at the Port of Gladstone in Queensland. This is expected to facilitate the closure of Barney Point Coal Terminal, which has raised pollution concerns among residents of the area for a number of years.[11]

Project Details

  • Operator: Wiggins Island Coal Export Terminal Pty Ltd (a consortium of 8 coal companies)
  • Location: Gladstone, Queensland, Australia
  • Annual Coal Capacity (Tonnes): 27 million (operating 2015)
  • Additional Proposed Annual Capacity (Tonnes): 57 million
  • Status: Proposed expansion
  • Type: Exports
  • Coal source: Surat and southern Bowen Basins, Australia
  • Cost of expansion:
  • Financing for expansion:

Articles and resources

References

  1. 1.0 1.1 >"Wiggins Island coal export terminal open for business," Business Daily, April 26, 2015
  2. "Coal transport infrastructure development" Queensland Government Department of Transport and Main Roads website, accessed January 2015
  3. 3.0 3.1 "Stranded assets: Australia's biggest coal project already at risk", RenewEconomy.com, April 17, 2014.
  4. "Wiggins Island Coal Export Terminal achieves major milestone", Media Release, September 30, 2010.
  5. "Coal Slump Leaves Australia Port Half-Used, Lenders at Risk", Bloomberg, October 14, 2013.
  6. "WICET delay over cost claims", Sydney Morning Herald, October 6, 2014.
  7. "Consortium says Wiggins Island Coal Export Terminal plans on track", ABC, November 23, 2014.
  8. "Wiggins Island Coal Terminal: Project overview," Queensland Government, updated Apr 1, 2015
  9. "Company Overview," WICET website, accessed June 2015
  10. "Glencore, partners in Australian port face heavy cost of boom era bet," Reuters, Mar 17, 2015
  11. "ACCC authorizes arrangements to close problem coal terminal at Gladstone Port" FindLaw Australia, April 22, 2010.

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