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Gold/Mining/Energy : Lundin Oil (LOILY, LOILB Sweden)

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To: Tomas who wrote (1575)	4/3/2000 1:09:00 PM
From: Tomas	Read Replies (2) of 2742

PNG pipeline partner Oil Search jumped 9%. "Analysts said it was almost a certainty that Comalco would commit to the project" Gladstone confirmed as Comalco refinery site Sydney Morning Herald, April 4 By JANE COUNSEL Rio Tinto's Comalco has finally confirmed Gladstone in Queensland as the preferred site for its $1.4 billion alumina refinery, yesterday announcing a feasibility study on the location. Comalco said detailed studies on commercial, technical and environmental issues had commenced with a final decision expected during the September quarter. Stockbroking analysts said it was almost a certainty that Comalco would commit to the project, after a bullish presentation yesterday. The news was also a major boost for the proposed $US2.5 billion ($4.1 billion) Papua New Guinea-to-Queensland pipeline, given the likelihood that the refinery will be a major user of gas from the pipeline. Shares in pipeline partner Oil Search jumped as high as $1.67 before closing 13c or 9 per cent firmer at $1.63. Wilson HTM resources analyst Mr Andrew Williams said Comalco had given the strongest indication yet that it was likely to formally commit to a gas contract from the pipeline, which would be a key catalyst for the partners to finally move ahead with its development. He said it was up to the pipeline partners to resolve the outstanding issues and bring the pipeline to commercial reality. "The onus has now been shifted from Comalco to the gas pipeline owners to make significant progress on their side of the equation," Mr Williams said. Queensland Government-owned Allgas, a subsidiary of Energex, has already contracted to buy up to 130 petajoules of gas from the pipeline over 20 years. About 27 petajoules per year of gas is needed to fuel operations at the proposed Comalco refinery. The confirmation of Gladstone came as no surprise to the market, with the Malaysian alternative never viewed by analysts as a serious option given the benefits offered by the Queensland site. Comalco has already received a $100 million infrastructure assistance package from the Queensland and Federal governments for the project. Other gas owners and sponsors in the project include US groups Chevron and Exxon, PNG company Orogen and Merlin Petroleum. Shares in Rio Tinto, which has launched a $1.5 billion bid for the 27.57 per cent of Comalco it does not own, finished $1.74 or 7 per cent higher at $25.16. smh.com.au

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