01/15/2014 05:15 EST | Updated 03/17/2014 05:59 EDT

Fortescue River Gas Pipeline Joint Venture: TransAlta To Help Build Natural Gas Pipeline

Bloomberg via Getty Images
Neville 'Nev' Power, chief executive officer of Fortescue Metals Group Ltd., poses for a photograph in front of conveyors transporting iron ore during a tour of the company's Solomon mining hub in the Pilbara region, Western Australia, on Monday, Dec. 2, 2013. Fortescue, Australia's biggest issuer of junk-rated mining bonds, is targeting investment-grade status as strength in iron ore prices lets the company cut its debt burden. Photographer: Sergio Dionisio/Bloomberg via Getty Images
CALGARY - Calgary-based utility TransAlta Corp. (TSX:TA) is forming a joint-venture with an Australian firm, whose first project will be a $178-million natural gas pipeline in Western Australia to supply fuel to an iron ore hub.

TransAlta will have a 43 per cent stake in the Fortescue River Gas Pipeline Joint Venture, with a subsidiary of DUET Group holding the rest.

The 270-kilometre line would connect another pipeline that runs parallel to Australia's western coast to TransAlta's 125-megawatt power station at Fortescue Metals Group's Solomon Hub further inland.

The pipeline is contracted to Fortescue under a 20-year agreement.

Construction is set to begin in July, with the pipeline coming into service in early 2015.

TransAlta has been involved in the Western Australia market — home to many remote mining operations — for 15 years, with six facilities able to generate a total of 425 megawatts.

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