Fortescue Metals Group said Pilbara Marine Pty Ltd., a Fortescue subsidiary, has won the tender for the second towage license at the Port of Hedland.

Fortescue CEO Nev Power welcomed the decision of the Pilbara Ports Authority (PPA) and Western Australian Minister for Transport Dean Nalder to increase competition in towage services at the port.

Under the terms of the license, Pilbara Marine will construct marine and landside facilities for the development of a tug haven behind Anderson Point berths 1 to 3 and provide towage services for an initial term of 15 years, expected to commence by 2019.

The license and tug facilities will provide additional capacity and an alternative supplier of tug services for all users of Port Hedland, improving efficiencies and maximizing port capacity. The total capital cost of developing the infrastructure and operating vessels is expected to be less than $200 million and will be incurred in FY17 and FY18.

“The introduction of choice and competition through the award of a second license will benefit all users of the port, and will ensure Fortescue can provide long-term, sustainable towage services crucial to meeting the demands of our customers,” Power said. “We look forward to working with the PPA and others to finalize arrangements that will safely deliver flexibility, efficiency and value.”