By Courtney Pearson
October 7, 2015
THE Wiggins Island Coal Export Terminal (WICET) is officially open for business three years after construction began, providing the coal industry with 27mt of export capacity per annum from the port of Gladstone.
Queensland’s newest export terminal shipped its first 1 million tonnes of coal at the start of September.
The privately-funded Wiggins Island Coal Export Terminal (WICET) is owned by eight Australian and international resources companies including Glencore, Aquila Resources, Caledon Coal and Yancoal.
The consortium celebrated mechanical completion and its first shipment of 73,000t of coal towards the end of April and hasn’t looked back since.
The terminal is the end destination for the longest train on Aurizon’s Central Queensland Coal Network – at 2.3km – which carried 11,000t of coal through the Blackwater rail system to WICET on its first run.
Aurizon operations executive vice president Mike Franczak said in March that the successful maiden run of the “record-breaking coal train is a positive sign of things to come when we commence railings to WICET in earnest next month”.
Caledon Coal supplied 80,000t of bedding down coal, which was spread 300mm high across the 1.2km by 535m stockyard. The stock piles will be able to reach up to 18m high, with an on-ground storage capacity of 1.85mt based on the shippers’ requirements.
Any Gladstone coal producer is able to apply for capacity at the terminal, and long term capacity rights are allocated through take or pay agreements.
New WICET chief executive Marcus McAuliffe said that WICET was built in response to increasing demand for coal out of the lower Bowen Basin and initially, the Surat Basin as well.
Mr McAuliffe said that despite any business issues that its customers may have been experiencing WICET’s commercial model remained solid.
“From WICET’s point of view our job is to deliver capacity to our shareholders,” he said.
“Our shareholders in return have entered take or pay contracts.
“The fact that we’ve got significant companies like Glencore and Wesfarmers and Baosteel behind those take or pay contracts is a great asset for WICET.”
During the construction phase of the project, WICET achieved a number of significant milestones.
“The biggest achievement is getting through the construction project, and getting the first ship successfully sailed in April with the safety record and environmental record that we’ve maintained,” Mr McAuliffe said.
WICET and Perth-based engineering group Monadelphous have been in a legal battle for more than a year regarding claims of cost blowouts and defective work.
The terminal claimed to have found “serious defects” with the quality of the work, and it was estimated to cost more than $30 million to fix the alleged issues.
WICET is in the process of trying to recoup costs for two contracts for “related infrastructure necessary for the construction of the terminal”, it said in a statement.
The contracts related to the construction of a 1.8km jetty, wharf and shiploader.
“The approach that WICET has taken is that we will pay every contractor what they’re owed under the contract, including any extra payments that they can substantiate with appropriate evidence,” Mr McAullife said.
“We’ve successfully closed all of the major projects with the exception of Monadelphous.”
Since October last year MMM (an unincorporated equal joint venture between Monadelphous and Malaysia’s Muhibbah Construction) “has continually refused to provide additional information in support of its claims”, according to WICET.
Monadelphous said it was disputing the claim in the Supreme Court.
“Monadelphous reaffirms its position and will continue to pursue its counterclaim in the Supreme Court of Queensland to recover costs associated with changes in the scope and nature of works required to be completed,” it said in response to media reports.
The joint venture’s counterclaim was expected to be more than $200 million.
In the community
The terminal’s long term investment and relationship with the local community were important to the consortium, Mr McAuliffe said.
In partnership with WICET, the Gladstone Ports Corporation completed Stage 1A of the $42 million East Shores maritime precinct in November last year.
WICET contributed $35 million to the project, while Gladstone Ports Corporation contributed the land and $7 million.
East Shores is a recreational hub that comprises a number of features including barbeque areas; a water play park; playground facilities; waterfront promenade; and fishing platform and jetty.
“It’s a world class piece of social infrastructure and the reaction to it from the community and from visitors has been fantastic,” Mr McAuliffe said.
WICET also contributed $37 million to the Gladstone-Mount Larcom Road upgrade.
Furthermore, the consortium contributes to local charities such as the Pyjama Foundation and Movember, as well as youth training initiatives, funding for youth event SUNfest and helping out schools through the donation of laptops and school supplies.
“We’ve got an active program of being involved with the community and helping the community where we can,” Mr McAuliffe said.
Mr McAuliffe said he believed that the terminal, which had the footprint to accommodate a maximum capacity of up to 120 million tonnes, would expand in the future.
“The timing of it is completely dependent on industry demand,” he said.
“If you’re thinking about the expansion of coal export facilities in Australia, WICET has a significant advantage in that its environmental approvals are already in place up until 84 million tonnes.
“This is a significant advantage [considering] it’s a three to four year process to get approvals and tenure in place.”
The WICET footprint is able to support four inloading and outloading streams, which would be supported by three major stockyard areas, with feasibility studies developed for up to 90mtpa.
Now that mechanical construction has been completed and the terminal has celebrated its first 1mt, the project is moving into the next phase.
Mr McAuliffe took over the role from former chief executive Robert Barnes, who delivered WICET through a significant part of its journey.
“I see my role as the new chief executive as continuing Robert’s work and steering WICET through the next phase of its journey,” Mr McAuliffe said.
“The next phase of its journey is about completing the commissioning of the terminal and ramping it up to full capacity and establishing the operation so that we can achieve the world’s best practice standards that we aim to achieve.”