Papua New Guinea-Australia gas project sees Brisbane demand
CANBERRA, June 11 (Reuters) - Developers of the proposed A$5.5 billion Papua New Guinea to Gladstone natural gas pipeline were negotiating to supply around 60 petajoules of gas to the Brisbane region amid expectations the pipeline would be extended, a spokesman said on Friday.
Chevron Services Australia Pty Ltd external affairs manager Cliff Leggoe said it appeared there was sufficient demand from potential customers to extend the pipeline.
''If those customers come to fruition there will definitely need to be a line into Brisbane,'' he told Reuters.
The Chevron Corp unit has previously indicated that Papua New Guinea gas could supply Brisbane through swaps and backhaul arrangements, using existing pipeline infrastructure linking Gladstone, western Queensland and Brisbane.
''What has been emerging over the past few months is that there is a growing market in Brisbane which would be more than you could handle through commercial arrangements such as swaps and backhauls,'' Leggoe said.
Chevron has estimated that the Brisbane demand could see start-up pipeline volumes of 140-150 petajoules, above the 100 to 120 petajoules per year demand needed for the project to proceed.
''We have got to have the markets in place by the end of next month and we are working toward it right now,'' Leggoe said.
He told Reuters negotiations were being held with an aggregator acting on behalf of potential Brisbane region customers, including electricity co-generation plants and industrial users.
Negotiations are also continuing to secure demand from Comalco Ltd , which is considering if it will build an alumina refinery in Gladstone or in Sarawak, Malaysia.
Leggoe said the mooted development of coal-fired power stations in Queensland remained a threat to the Papua New Guinea pipeline, with several plans on the drawing board. ''If two or three of them get up, this project will fall over,'' he said.
The Australian Gas Light Co and Malaysia's Petronas will build own and operate the pipeline from Australia's sea border with Papua New Guinea if the project goes ahead.
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