Expansion verdict on horizon for Dalrymple Bay

Dalrymple Bay Infrastructure looks likely to proceed with a feasibility study this year for the $1.27 billion 8X project to expand coal terminal operations. The company - which listed on the stock exchange in December - released its FY20 results to the market today, showing that the Dalrymple Bay terminal near Mackay shipped 55 million tonnes of coal last year compared to 67 million tonnes in 2019. It also announced plans for an on-market buy-back program, enabling it to buy back up to 10 per cent of its issued capital. Capacity at Dalrymple Bay terminal is fully contracted to 84.2Mtpa from July 2022 to June 2028 on a 100 per cent take-or-pay basis with evergreen renewal options. Dalrymple Bay Infrastructure described the proposed terminal expansion as presenting a well-defined technical and commercial pathway to expand capacity in four phases. The 8X Expansion is focused on terminal optimisation by maximising storage volume as well as increasing inloading and outloadingcapabilities within the existing footprint of Dalrymple Bay Terminal and its marine facilities. Managing director and chief executive offficer Anthony Timbrell said Dalrymple Bay Infrastructure had proceeded to sign conditional access agreements for 100 per cent of the expansion capacity. Access seekers underwrote the costs of a pre-feasibility study, completed late last year. Mr Timbrell said Dalrymple Bay Infrastructure would progress the feasibility study this year, subject to access seekers agreeing to continue to underwriting the cost. This would be due for completion in June 2022. In a statement on the company's financial results, he described 2020 as pivotal for Dalrymple Bay Infrastructure. "As the world’s largest metallurgical coal export facility, DBI is ideallyplaced to leverage the strong outlook for global steelmaking as we are fully contracted on a 100 per cent take-or-pay basis until June 2028," he said. "This also means we are not exposed to daily volume or commodityprice volatility. “DBI’s forecast funds from operations (FFO), underpinned by cash flow stability and an investment grade balance sheet, should support a sustainable distribution going forward. "The company remains on track to pay $45 million in distributions for the six months ended 30 June 2021." Mr Timbrell said the company was continuing to plan for the proposed transition to a lighter-handed regulatory framework for the July 2021 regulatory reset, subject to final confirmation from the QueenslandCompetition Authority. This would allow it to transition to a commercial price setting framework under which tariffs were negotiated directly with customers, he said. Dalrymple Bay Infrastructure reported total Revenue of $23.4 million, with Terminal Infrastructure Charge (TIC) revenue of $13 million, for 2020.

Expansion verdict on horizon for Dalrymple Bay

Industry Queensland

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