PNG gas pipeline closer to go-ahead - The Australian, August 13
By DAMON FRITH and JOHN MACLEAY
THE $5.4 billion Papua New Guinea gas pipeline took another leap
towards formal go-ahead yesterday after securing another big
customer.
Queensland government-owned Ergon Energy signed an agreement to
buy up to 50 petajoules of gas a year.
Another government-owned utility, Energex, last month signed up for
130 petajoules a year.
When the idea was first floated a few years ago, the PNG pipeline
partners, led by Chevron, estimated that at least 100 petajoules of
demand would be needed to underwrite the cost of the project.
"It looks like there is now sufficient load to justify the pipeline," said
AGL managing director Len Bleasel.
AGL and its joint venture partner Petronas of Malaysia have been
appointed to build the Australian section of the 2500km pipeline.
Mr Bleasel yesterday confirmed the line would be extended from its
original destination of Gladstone to Brisbane, supplying gas to the
Energex-owned Allgas metropolitan network.
The gas would come from the Kutubu-Gobe and Hides gas fields in
PNG's Southern Highlands with first gas forecast to flow in late 2002.
All parties involved in the project, from customers to landowners to
developers, met yesterday at Port Moresby to witness the signing of
the Ergon agreement.
The development partners ? Chevron, Merlin Petroleum, Oil Search,
Orogen Minerals and Petroleum Resources ? also approved the next
commitment of $US50 million ($77 million) to the project.
From Port Moresby, project spokesman Cliff Leggoe said the $US50
million would allow completion of detailed engineering studies and issues
involved with development licences, landowners and financing.
"Until it's all in place you haven't 100 per cent got a project," he said.
Project director and Chevron executive John Powell said: "We welcome
the initialling of this gas sales agreement with Ergon Energy. Base load
power generation in Townsville is long overdue."
Mr Powell said the pipeline would generate regional development, much
as the Eastern Gasfields pipeline had facilitated new projects in
Western Australia.
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