PNG: Queensland energy policy will fuel gas pipeline project
The National, May 26
QUEENSLAND'S Cleaner Energy Policy will have a significant positive impact on the PNG Gas Project, the major developer, Oil Search Limited, has said.
"The policy announcement represents a very significant milestone for the project in that it provides the favourable environment required to close commercial gas contracts with customers in Queensland and provides the necessary certainty to project sponsors and their many customers about the policy settings in which they will operate in the coming years," Oil Search managing director Peter Botten said.
The Queensland Government announced its new policy on Tuesday.
"The policy is a ground breaking initiative by the Queensland Government ensuring sound commercial development of gas and environmentally responsible fuels, together with coal, as the key energy sources for development of the State," said Mr Botten.
"It will ensure that gas fired generation or renewables will make up at least 15 per cent of the State's electricity market by 2005. This is important in providing market certainty for gas-based generation on sound commercial terms."
The Queensland Government announced that it was working with the AGL/Petronas consortium (APC) to advance construction of the PNG gas pipeline by first building the Townsville to Gladstone section.
Mr Botten said this should lead to early development of large gas markets in that part of Queensland.
This section represents about 25 per cent of the total length of the Australian portion of the line.
He said Oil Search viewed this as a positive initiative for the gas project.
Subject to successful closure of commercial agreements, this could result in commencement of construction of this portion of the pipeline later this year, with completion of the line by mid 20002, he said.
"The release of the energy policy adds further momentum to the project, following other recent announcements, with Comalco choosing Gladstone as the preferred site for their alumina refinery and agreement between the Hides and Kutubu owners to dedicate sufficient reserves to the Queensland market for at least 30 years," he said.
He said the focus of the project developers is to now close gas contracts with customers as soon as possible, in the framework of the energy policy.
"There will also be further emphasis on clarifying the PNG Government position on ownership of the PNG infrastructure and various financing issues," he added.
According to documented studies, the PNG gas project will make the largest, single contribution to the reduction of Australia's greenhouse gas emission in the next decade and beyond.
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