By a staff reporter
Aurizon Ltd and GVK Hancock's Abbot point coal terminal development in Queensland’s Galilee basin has progressed with a non-binding financial and governance agreement between the two parties.
In a statement to the Australian Securities Exchange, Aurizon said the proposal would provide equity and debt funding – including through third parties – for the projects to reach financial close.
“The parties have made further progress over the last few months and have reached alignment on a rail solution and on the commercial terms for the proposed transaction such as governance, timing of milestones, funding and conditions for completion,” Aurizon said.
“Whilst the proposal remains non-binding and with further diligence to be undertaken, the parties are aligned on these key aspects of the proposal, with drafting of definitive legal documents now being undertaken."
The group said the 500 kilometres of new corridor and track in the original JV announcement in March would now be reduced to 300km initially before connecting to exisiting Aurizon infrastructure.
“This will also allow a phased development at the Abbot Point T3 terminal to match volumes and ramp-up, thereby materially reducing the initial cost of infrastructure,” the group said.
As previously announced, Aurizon will acquire a 51 per cent stake in Hancock Coal Infrastructure Pty Ltd (HCI), which owns GVK Hancock’s rail and port projects including the Alpha, Alpha West and Kevin’s Corner coal projects in the Galilee basin.
“There’s been considerable work by both parties over recent months to better define the rail transport solution for the project, both from an engineering and a commercial perspective,” Aurizon managing director and chief executive officer Lance Hockridge said.
“We can see from our assessment that GVK Hancock’s coal assets are very well advanced,” he said.