PNG Pipeline: Second Major Gas Sales Contracts Initialled
Full text of statement released to the Australian Stock Exchange on Aug 12, 1999
From Asia Pulse, Aug.12
Managing Director of Australian Gas Light Company (ASX:AGL), Mr Len Bleasel,
speaking on behalf of the AGL/Petronas Consortium, welcomed an important
further development of the PNG to Queensland Gas Project.
Preliminary agreement has been reached between Ergon and the PNG Gas
Producers on a 20 year gas supply contract, for up to 50 petajoules a year, to
supply a number of power projects and industrial customers in Northern
Queensland.
Ergon has acted as an aggregator for the on-sale to a number of major customers
including Stanwell, QNI and AES.
Commenting on today's announcement, Mr Bleasel said "These agreements are
the second major step towards achieving financial close for the proposed PNG to
Queensland pipeline. The agreement on price and fundamental terms and
conditions clearly signals that the total volumes needed to make the pipeline
viable are now attainable.
"These contracts in Northern Queensland are very important as they will help to
underpin the total economics of the pipeline. We will continue to work with the
Project Sponsors to finalise the remaining administrative, planning and regulatory
issues, including making final decisions about the most satisfactory route to
deliver PNG gas into the Queensland market.
Once all agreements are finalised AGL and Petronas will build, own and operate
the 2,500 kilometre pipeline from the PNG border to Brisbane. Estimated cost of
the project is $1.5 billion.
Mr Bleasel concluded, "We are delighted with the support the project has received
from the Papua New Guinea Government. I would like to thank the Prime Minister
Sir Mekere Morauta and his Government for their co-operation in helping the
project reach this important stage in its development. The PNG Gas Project will be
a major driver of economic growth in PNG.
"In Australia, The Premier of Queensland, The Hon Peter Beattie, the Deputy
Premier and Minister for State Development The Hon. Jim Elder and the Energy
Minister The Hon. Tony McGrady have all played key roles in maintaining the
momentum on, what is overall, the largest infrastructure project ever to be
undertaken in Queensland. We thank both the Queensland and Commonwealth
Governments for their ongoing support.
"At a time when the pressure is on to improve Australia's greenhouse gas
emissions, this agreement demonstrates the commitment of the PNG and
Queensland Governments to reducing carbon emissions and to a clean air
strategy for the whole region, by strongly supporting the use of natural gas to fuel
Queensland's next phase of growth.
"Speaking on behalf of both AGL and Petronas, I can say we are ready to build this
pipeline just as soon as all the business arrangements are completed. At this
stage we believe financial close can be achieved by mid next year and then the
pipeline could be completed by early in 2003."
On 27 July 1999, Energex signed a similar agreement for a 20 year gas supply
contract for up to 130 petajoules a year to supply markets in south eastern
Queensland. This agreement between Ergon and the PNG Gas Project Sponsors
is an addition to that contract. |
