Transalta has won an agreement to build, own, and operate a combined cycle gas power station in South Hedland to supply Pilbara resources company with energy.
The deal will see it provide energy to WA utility company Horizon Power and to Fortescue Metals subsidiary The Pilbara Infrastructure.
The project is slated to cost around $750 million, which includes the cost of acquiring existing equipment from Horizon, and will be built on an existing site at the Boodarie Industrial Estate.
"This latest investment will have a power plant ready to serve a new customer, Horizon Power, and an existing customer, Fortescue in the Pilbara region of Western Australia by 2017," Transalta's CEO Dawn Farrell said.
The development has been fully contract under 25 year power purchase agreements with Horizon and Fortescue, which may be expanded to accommodate additional customers at a later date.
For now it is focused on supply Horizon and Fortescue's port operations.
Miners have been looking more towards gas as an alternate energy supply for their operations and to reduce operating costs.
Fortescue has been making the major push in the Pilbara, signing a long term agreement earlier this year.
AngloGold Ashanti have also signed a natural gas agreement to power its WA Sunrise and Tropicana gold mines.
The Transalta combined cycle gas power station will be commissioned in 2017, creating 250 jobs during construction and 20 jobs will operating.