Alcan terminates 20-year gas sales deal

Canadian aluminum company Alcan Inc. on June 27 canceled a 20-year gas sales deal with Australia’s Woodside Petroleum due to gas price hikes.

Alcan signed the agreement last November to buy gas from Woodside’s part-owned Blacktip gas field in the Joseph Bonaparte Gulf off Australia’s northwestern coast. Woodside owns 53.85 percent of Blacktip. ENI Australia, a unit of Italy’s ENI SpA, owns the rest.

Under the deal, Woodside and ENI Australia agreed to supply 44 petajoules (about 850 million tons) of natural gas each year for up to 20 years.

In a statement released June 27, Alcan said it was pulling out of the deal because of Blacktip’s request for a “substantial price increase” on the gas, which was to be delivered to the company’s Gove alumina refinery in the Northern Territory.

“We are extremely disappointed by the actions of Blacktip as we are aware of the impact of this change on a number of stakeholders,” said Richard Yank, president of Alcan’s Pacific alumina and bauxite operations, adding that the proposed price hike was “unacceptable.”

The amount of the price hike was not immediately released.

The cancelled agreement also included a 620-mile pipeline across Australia’s Northern Territory to transport the gas to Alcan’s refinery on Gove Peninsula. Alcan said it was “reviewing the implications of this situation” on the proposed pipeline development.

—The Associated Press