Former WA premier calls for compromise in row over MinRes levies
The former WA premier has called on Chevron to compromise on levies it will pocket from Mineral Resources for iron ore exports.
Former West Australian premier Colin Barnett has called on oil and gas giant Chevron to compromise on levies it is set to pocket from Mineral Resources for iron ore exports from the Port of Ashburton.
Mr Barnett, one of the architects of deals between the WA government and Chevron on the Wheatstone LNG project, said it was never envisaged that the Port of Ashburton would be used for bulk iron ore exports.
The Australian has revealed Chevron stands to reap more than $1bn if the MinRes Onslow Iron project lives up to expectations, with the WA government collecting levies on behalf of the US-based energy major under the terms of a secret deal.
Chevron has described port fees as a “cost of doing business” after standing its ground in talks with the WA government about waiving its rights in regard to use of a shipping channel and cargo wharf at the Port of Ashburton.
Houston-headquartered Chevron built the port as part of the $US34bn ($54.4bn) Wheatstone project and then handed it over the WA government between 2017 and 2018 while retaining some rights to the now state-owned public infrastructure, as reflected in the charges levied against MinRes.
Mr Barnett said MinRes should not get a free ride for use of the shipping channel and cargo berth, but nor should Chevron pocket excessive fees.
“Chevron build the port as part of Wheatstone and it paid for it all, the shipping channel and the wharves and everything else,” he said.
“But it was certainly never expected that you would get iron ore, or a bulk commodity like that, going through there.”
MinRes built its own transhipper wharf and facilities west of the infrastructure built by Chevron, but uses part of shipping channel dredged by Chevron to accommodate LNG carriers.
Chris Ellison-led MinRes also makes use of public cargo wharf for shift changes and maintenance work.
The embattled company was hit with a 90c-per-tonne shipping channel levy and a 50c per tonne cargo wharf levy from mid-2024 just as its $3.5bn Onslow Iron project was coming into production.
MinRes is now embroiled in a legal battle with the WA government’s Pilbara Ports Authority (PAA) after refusing to pay the levies, which the PPA has told it will be passed on to Chevron.
MinRes and the PPA have launched separate legal cases in the WA Supreme Court with a strong possibility they will be consolidated and Chevron added to the proceedings.
Mr Barnett said the levies were out of proportion and noted Chevron could never have expected such a financial windfall from an iron ore project.
“I think Chevron is entitled to get some revenue from the use of facilities it has built, but the amount is out of proportion now because of the volumes,” he said.
“If I was still the minister, I’d be trying to find a compromise. MinRes should still pay something, but very much a lesser amount.”
Mr Barnett said it was a big issue because the Liberal-Nationals government he led when Wheatstone was being developed around 2011 hadn’t framed agreements with bulk exports of iron ore in mind.
“The volume is huge (35 million tonnes per year), and we never anticipated iron ore would go out of the port,” he said.
“That charge would be just about protecting some sort of rights of Chevron should people want to share in some infrastructure anticipating that could be another gas project.”
The MinRes share price jumped more than 8 per cent to $18.04 in trading on Monday as it dug in for a fight with Chevron and the WA government over the levies. The stock has rebounded since closing at a five-year low of $14.40 last Wednesday as trade war fears compounded concerns about its mountain of debt.
Chevron made $US5.2bn from its WA operations in 2024, up from $US4.5bn in the prior year, aided by foreign exchange gains.
Chevron has declined to answer questions from The Australian about the levies being imposed on MinRes, or to confirm its secret deal with the WA government on the Port of Ashburton.
However, Chevron has pointed to economic benefits from its $3bn investment in the port.
“Wheatstone joint venture participants have invested over $350m in social and critical infrastructure in Onslow including new power and water infrastructure, health facilities, and transport infrastructure,” a Chevron spokesman said.
“This investment has helped unlock industrial development in and around Onslow and benefited subsequent project proponents such as MinRes.”
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