Premier backs gas for Southdown

Premier Colin Barnett has put Grange Resources on notice over its energy plans for the Southdown iron ore project, saying he wants the junior miner to be supplied by gas.

Last week, Regional Development Minister Brendon Grylls set the State Government on a collision course with Grange when he said it was his “crystal-clear position” the company be a customer of the proposed Bunbury to Albany gas pipeline.

His view met opposition from Grange chief executive Russell Clark, who said the Chinese-backed group had no intention of pursuing gas as a power source.

According to Mr Clark, Southdown’s budget and timeline were dependent on Grange’s plans for a transmission line between Collie and Wellstead, which would be built by Western Power at an up-front cost to taxpayers of $380 million.

But Mr Barnett, during a visit to Albany last week, entered the debate by backing his Cabinet colleague Mr Grylls. He said it was the Government’s “preference” that Grange agree to take gas from the proposed pipeline to help underwrite the project, which was a key promise by the Liberal and National Parties in the lead-up to the 2008 State election.

He also issued a thinly veiled warning to Grange, saying it was “unlikely” the pipeline and the transmission line would both be built and the Government could influence the final outcome.

“From their point of view, a long powerline from Collie is the cheaper option. In terms of the long-term development of the State, I don’t believe that’s the best option,” Mr Barnett said on ABC local radio.

Mr Barnett, who has clashed with big business over the composition of other major projects around the State, said “one of the key elements of building new gas pipelines is to find large baseload customers – Grange is one”.