Alinta/Alcoa/DUET Consortium - variation - s.87B undertaking

On 10 March 2010, the ACCC accepted a variation to the undertaking of Alinta Limited and others. The variation, which is the first variation to the undertaking, provides for several amendments to the undertaking in light of changes in circumstances that have occurred since the undertaking was accepted.

In summary, the variation permits the operator of the Dampier to Bunbury Natural Gas Pipeline ('DBNGP') to reach agreements with individual shippers in order to pass on a proportion of the increased price Epic Energy (WA) Transmission Pty Ltd will pay for system use gas under its agreement with Alinta Sales Pty Ltd. There are two types of agreements that the DBNGP operator may reach with shippers:

• to charge a shipper a system use gas tariff; or
• to reduce the charges payable by a shipper under the standard shipper contract in consideration for that shipper supplying its own share of system use gas to the DBNGP.

The variation permits both types of agreement provided that the tariff imposed or reduction of charges is not less favourable than that agreed with Alinta Sales Pty Ltd, Alinta Energy (LPG) Pty Ltd, or a shipper that is an associate of Prime Infrastructure Holdings Limited.

The variation also provides for:

• the removal of Alinta Network Services Pty Ltd as a party to the undertaking given that it no longer has a role in the operation of the DBNGP;
• the amendment of references to corporate entities within the undertaking to reflect name changes that have occurred since 2004;
• the deletion of obligations which have been discharged by the parties (for example, in relation to capacity expansion and settlement of the Epic proceedings); and
• the deletion of ring fencing and non-discrimination clauses which are covered by the 2007 undertaking of Babcock and Brown Infrastructure and Babcock and Brown Power.