Papua New Guinea: Oil Search sure of gas pipeline - Sydney Morning Herald, March 1
By JANE COUNSEL
Oil Search said yesterday it was more confident than ever that the $US2.5 billion Papua New Guinea to Queensland gas pipeline would go ahead, with several key issues soon to be finalised.
Oil Search, a major participant in the pipeline project, was particularly bullish during briefings to analysts to mark the release of the company's better-than-expected $US23 million ($36 million) full-year profit.
The company's managing director, Mr Peter Botten, said he expected several matters vital to securing the pipeline would shortly be completed.
"The economics and fundamentals of the project are close to reality," Mr Botten said.
These included discussions on the unitisation of the Hides field, one of the fields supplying gas to the pipeline, and finalisation of the structure of the Queensland Government's future energy plan.
Final submissions on Queensland's future energy mix are understood to have been put before Cabinet this week with expectations that the Government will recommend that between 20 and 30 per cent of the State's future energy be sourced from gas.
This would underpin the future of the pipeline project along with other gas projects in the coal-intensive State, at a time when Queensland is trying to curb its greenhouse emissions.
The Queensland Government's Ergon Energy and energy retailer Energex have already underpinned the pipeline by signing up for a total of 170 petajoules of gas over 20 years.
And expectations that Rio Tinto's Comalco will announce within the next few weeks that Gladstone in Queensland is the site of its proposed $1 billion alumina refinery has also boosted prospects for the project.
The finalisation of the unitisation of gas reserves in the Hides field, one of the last stumbling blocks, will clear the way for the pipeline to secure finance.
Field owners Oil Search, Exxon and Santos have had difficulty coming to an agreement but Mr Botten said he expected a commercial conclusion to talks by the end of next month.
Oil Search's record profit for 1999, which more than doubled 1998's $US9.3 million result, was boosted by record oil production of 8.35 million barrels.
Oil Search shares yesterday closed 4c higher at $1.62.
smh.com.au |
