Twiggy also looking at Natural gas pipeline
Billionaire Andrew Forrest is studying a proposed 2,400-kilometre transcontinental natural gas pipeline across Australia as part of his iron ore company's strategy to diversify.
Fortescue Metals confirmed it has undertaken work for a duct that would link gas-rich Western Australia with the energy-strapped East Coast power markets. The project, being considered by the federal government, may cost as much as $5 billion, according to one industry estimate.
Fortescue in January added a search for copper in Colombia and lithium brines in Argentina to its global hunt for mine projects that give it exposure beyond iron ore. Steel production in China will drop each year through to 2023, while iron ore shipments from Australia and Brazil rise before leveling off, the federal government forecast this month.
"We're extremely good at infrastructure and we're extremely good at operations," Forrest said on Wednesday. "Right now, that formula is doing iron ore and doing it extremely well. But I want to take that formula and bring it in to these other industries."
His great, great uncle Sir John Forrest, WA's first premier was instrumental in the construction of the state's water pipeline to the goldfields at the turn of the 20th century. "Everyone said that won't work," Forrest said. "And they did it with new materials of construction and new techniques of construction, which had never been done and it's still there today. That was over 120 years ago. "
Despite government backing, a pipeline may not be economical as there are cheaper supply options available, consultant Wood Mackenzie said last year.
Forrest is also backing the construction of an LNG import terminal on the East Coast by 2020 through his Squadron Energy unit. He revealed he first offered the project to Fortescue, which turned it down in order to concentrate on the cross-country gas pipeline project.
"Fortescue said we don't want to be distracted from that," Forrest said. "I said I think we need a virtual pipeline in the meantime and they said knock yourself out chairman, but that's not for us.
Bloomberg
Add to My Watchlist
What is My Watchlist?
