Bloomberg: Papua New Guinea Gas Pipeline Reaches Sales Target with Ergon Pact
Brisbane, Aug. 12 (Bloomberg) -- Ergon Energy Ltd. has
signed an agreement to buy natural gas from Papua New Guinea,
meaning the US$3.5 billion project to pipe gas to Australia's
Queensland state has met its sales target.
The pact with Ergon, owned by the Queensland government,
comes on top of an agreement signed last month with another state-
owned utility company, Energex Ltd. Ergon signed up for as much
as 50 petajoules a year, over 20 years, while Energex plans to
take 130 petajoules per year.
``The gas producers have told the state government that the
Ergon agreement means foundation volumes have been secured for
the more than 2,000 kilometer pipeline to Queensland,' state
Premier Peter Beattie said in a statement issued from Port
Moresby, Papua New Guinea, where the pact was signed.
Still, the owners of the gas in the highlands of Papua New
Guinea, including Oil Search Ltd., Chevron Corp. and Orogen
Minerals Ltd., don't expect to make a final decision to go ahead
until the middle of next year, when financing, government
approvals, and sales agreements, have been concluded.
Ergon and Energex will take about 100 petajoules when the
pipeline is completed late in 2002 or early in 2003, and
potentially more than 200 petajoules in the future, the
government said.
The partners in the project have begun hiring 200 people as
they start spending A$95 million (US$60 million) on engineering
and design work on the pipeline.
Oil Search shares fell as much as 1 cent, or 0.4 percent, to
A$2.40. Orogen, a mining and energy company controlled by the PNG
government, rose as much as 7 cents, or 3.9 percent, to A$1.89.
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