Tarong Talking to Papua New Guinea Gas Partners About Queensland Generating Plant Plan
Brisbane, Australia, July 19 (Bloomberg) -- Tarong Energy
Corp., a Queensland state-owned energy utility, is ''well
advanced'' with plans for a power station near Brisbane that
would use natural gas supplied by a proposed pipeline from Papua
New Guinea.
Tarong Chairman Ken Dredge said the 700 megawatt plant would
use about 25 petajoules of gas per year, providing more than one-
fifth of the demand required to make the US$3.5 billion PNG Gas
project viable. It would be built 30 kilometers northwest of
Queensland's capital Brisbane at Wivenhoe, where Tarong currently
has a hydro-powered generating plant.
Tarong Energy will be able to decide within ''a few months''
whether to sign up for gas from Papua New Guinea, Dredge said.
''We have a strong interest (in the PNG gas) and there's no
reason that couldn't coalesce into something stronger sooner
rather than later.'' Still, ''we haven't completed a full
feasibility study,'' which will be required before the proposal
can be put to the Queensland state government.
Chevron Corp. and Oil Search Ltd. are leading the project to
pipe gas 2,500 kilometers from Papua New Guinea's central
highlands to Gladstone on the Queensland coast by mid-2002. They
said they are ready to spend US$60 million on the next phase of
the project once they have settled the first contracts with
potential buyers of the gas before the end of this month.
Tarong would ''most likely'' develop the plant in a 50-50
joint venture with Entergy Corp. of the U.S., said Dredge.
Entergy is Tarong's partner in a plan to expand the existing coal-
fired Tarong power station by 900 megawatts, from its existing
capacity of 1,400 megawatts.
The sale of gas for Wivenhoe would be negotiated through
another state-owned utility, Energex Ltd., said a spokesman for
Chevron Corp., which is backing the pipeline project.
Shares in Oil Search, the largest holder of oil and gas
reserves in Papua New Guinea, rose 6 cents, or 2.6 percent, to
A$2.37.
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