Papua New Guinea Pipeline project in progress
"The National", Wednesday May 13
LAE: Significant progress has been made on the proposed PNG-Queensland gas pipeline project, Orogen Minerals managing director Charles Lepani told shareholders here yesterday. Addressing the company's annual general meeting, Mr Lepani said that the PNG-Queensland gas pipeline would be a significant and exciting investment for Orogen.
"A range of successful negotiations is now taking place with potential customers, pipeline builders, owners and operators, landowners in PNG and Australia and with governments in both countries," Mr Lepani said. He said the engineering feasibility studies would be finalised this year in preparation for the consortium to work on the detailed design and construction of the gas pipeline. Mr Lepani said that a decision on the project would be made by March 1999 and that the first gas delivery was expected by Sept 2001.
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Orogen confident of pipeline's customers
"The National", Thursday May 14
BRISBANE: The consortium behind the proposed A$3 billion (K3.95 billion) gas pipeline from Papua New Guinea to Queensland is confident that Comalco Ltd would decide to build its greenfield alumina refinery in Gladstone and become one of the pipeline's foundation customers, Orogen Minerals Ltd managing director Charles Lepani has said.
But if the multi-billion dollar gas refinery was not built at Gladstone, the consortium had other potential customers it was negotiating with, Mr Lepani said yesterday. "If they eventually decide not to go for Gladstone we have to be prepared," he said after an Orogen shareholders meeting in Brisbane.
Orogen, a participant in the Kutubu and Gobe oil and gas fields, forms part of the consortium which will develop, construct and operate the proposed natural gas pipeline from Kopi in PNG to Queensland. Chevron Asiatic Ltd are project managers.
Comalco has short-listed Gladstone and Bintula in Sarawak, Malaysia, as the preferred sites for its multi-billion dollar refinery, which Mr Lepani said, would require between 25 to 26 petajoules of gas a year.
He said he was confident from private discussions with Terry Palmer, the managing director of Comalco, that Gladstone would be chosen.
"We know they'll say yes," he said.
"Even if Malaysia has that one or two per cent advantage in rate of return they would prefer to still stay here," Mr Lepani said, pending other state and federal government conditions falling in place. "All things indicate they will stay here but they will push us right to the wall."
He said Comalco were "dragging their feet" as a decision by the Comalco investment committee on the alumina project was not expected until October. "We're trying to get them to make a decision earlier," he said.
Comalco and the proposed Stanwell-Destec gas-fired power station in Townsville were the two foundation customers for the pipeline, demanding reserves of six trillion cubic feet of gas. Mr Lepani said PNG had potential reserves of 40 trillion cubic feet. Joint venture partner Oil Search Ltd's recent purchase of BP's upstream oil and gas assets in PNG had boosted reserves to meet foundation demand for the pipeline, he said.
Mr Lepani said now that the pipeline project was no longer considered a "pie in the sky" project, other potential customers had come forward including an alumina refinery.
"We now have three or four big fellas knocking on the door and we are very pleased with that," he said. "We're satisfied we've got the foundation customers to get the project going." Besides Comalco and Stanwell-Destec, the combined demand of the other potential customers could be between 40 to 50 petajoules a year, he said.
He said the other options also included the pipeline extending west from Townsville, instead of south to Gladstone.
The successful tender to design and construct the pipeline would probably be announced next week, he said.
Engineering feasibility studies on the project are due for completion this year, with a development decision on the project being made in the first quarter of 1999 and the first delivery of gas to customers in the third quarter of 2001.
The pipeline consists of two sections, the "upstream" pipeline and infrastructure in PNG and the "downstream" marine and onshore pipeline from PNG to Gladstone. Orogen chairman David Beatty said the company did not intend to invest in the pipeline project "downstream" unless the operator and the customers required them to do so.
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