New milestone for PNG gas project. "It will impact on GDP by more than 14.5%".
The National, Friday August 13
By KEVIN PAMBA
PORT MORESBY: The multi-billion kina PNG to Queensland gas project yesterday crossed another milestone when producers secured foundation volumes by signing on Queensland state-owned energy group, Ergon Energy Pty Ltd.
Yesterday's signing was heaped with commendation with all parties declaring that the next step forward depended on the "cooperation" of all parties.
The agreement - subject to respective board and shareholder approvals - is for the PNG gas project to supply up to 50 petajoules of gas per year to Ergon.
Ergon is acting as the aggregator a number of North Queensland customers including Stanwell, QNI and AES.
Two weeks ago, another Queensland government-owned energy group, Energex Ltd signed preliminary sales agreement as an aggregator for southeast Queensland buyers.
The two signings now secures the foundation volume of 100 petajoules. The total customer requirements so far is 180 petajoules and the Brisbane region is now included as an additional market.
Yesterday's occasion also saw the signing of a "Statement of Cooperation" by Petroleum and Energy Minister Tommy Tomscoll, Queensland premier Peter Beattie, gas project director Dr John Powell and Oil Search managing director Peter Botten.
The statement is a commitment by project partners of their willingness to cooperate and see the project to full fruition.
Prime Minister Sir Mekere Morauta who witnessed the ceremony, said "today's signing by some of the world's biggest companies and gas customers in Australia is another indication of the progress being made in the PNG-Queensland gas project and marks a turning point in investor confidence in the Government and people of Papua New Guinea."
"In the mini-budget on Tuesday, my Government set foundations for a return to economic and financial stability.
"Two days later, we are able to sign this important piece of paper that sets the scene for the biggest resource project Papua New Guinea has seen."
Premier Beattie said "the Ergon agreement is another milestone for this massive project."
"First, the gas producers have told the State Government the Ergon agreement means foundation volumes have been secured for the more than 2000 kilometre pipeline to Queensland."
"Second, the Ergon agreement includes the gas requirements for the proposed Stanwell gas fired power station at Townsville." "The development of a power station in far north Queensland is vital for the region to reach its economic and industrial potential, especially as a centre for mineral processing."
Minister Tomscoll said the magnitude of the project is reflected in a recent report by the Australian National University which says it "will impact on PNG's GDP by more than 14.5 per cent; impact positively on the exchange rate by about 8.7 per cent; improve the welfare of Papua New Guineans by up to 8.7 per cent; increase government revenue by 12.3 per cent; and the overall budget position will improve by about 2.4 per cent of GDP."
Yesterday's signing sets the phase for the third stage for "front end engineering and design".
"This A$95 million (K169 million) stage will progress in parallel with the final approvals and financial close which is expected in the next 12 months," Premier Beattie said.
This is expected to create 200 jobs.
Southern Highlands Governor Anderson Agiru commended the signing and stressed the commitment of the SHP and Gulf provincial governments and the resource site landowners at Hides, Kutubu, Moran and Gobe to the project.
Hides landowners chief and spokesman for all landowners, Larry Andagali, said they were totally behind the project.
Mr Andagali further called the Petroleum Minister to speed up the forum process for the landowners and others in the country. He said landowner issues on Australian end had been completed.
Managing director of the AGL which will build, operate and own the pipeline in consortium with Petronas of Malaysia said they are committed to work on the pipeline.
Len Beasel estimated the cost of the pipeline construction from PNG border to Brisbane to be A$1.5 billion.
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