DUET (ASX: DUE) announced yesterday that it has won a Chevron Australia project to build, own, and operate a $95 million domestic gas pipeline linking Chevron's plant to the Bunbury pipeline.
Through DUET's 100%-owned DBP Development Group subsidiary, the company will refurbish 87 kilometres of existing line, as well as add on an extra 22 kilometre link. The agreement include an initial 30-year 100% "take-or-pay" contract, essentially ensuring that Chevron grabs all the pipeline's gas for the next three decades.
To cover costs, DUET is undergoing a $100 million placement (a private "public offering") at $2.03 per share, about 2.4% less than last Friday's closing price. Trading has been halted for the day as the company carries out its transactions with private investors.
Once the dust has settled, DUET expects its 2014 distribution to remain unchanged at $0.17 per share, with an extra $13 million of cash available for distribution during the 2015 calendar year. The project should be completed by Q4 2014.
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Motley Fool contributor Justin Loiseau has no position in any stocks mentioned in this article. You can follow him on Twitter @TMFJLo.
