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

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To: Tomas who wrote (1791)	8/17/2000 10:10:12 PM
From: Tomas	of 2742

Papua New Guinea: Critical phase for PNG pipeline proposal The Age (Australia), August 16 By BARRY FitzGERALD Crunch time has arrived for the $US3.5 billion ($A6 billion) proposal to pipe gas from Papua New Guinea's remote highlands to the Queensland market. The Chevron-led consortium backing the ambitious project is working towards having critical aspects of the project's commercial framework in place by the end of the month. That requires the finalisation of talks with the PNG Government on fiscal terms covering the project and the finalisation of sales agreements in the Queensland market. Talks with the PNG Government on the fiscal terms are at an advanced stage and a resolution is expected in the next couple of weeks, according to one source yesterday. Discussions with the Queensland customer base for the gas-pipeline project are also under way, with the focus being on converting letters of intent with the gas aggregators, Energex and Ergon, into firm contract positions. The consortium is also lobbying the Federal Government for it to play a role in facilitating the financing of the PNG Government and local landowner involvement in the project. "We believe that PNG and the landowners have to have a meaningful stake in the project's PNG infrastructure base. But that has to financed somehow," a source said. Exxon (a 30 per cent partner) has taken a lead role in the Canberra lobbying efforts, renewing speculation that Chevron (9 per cent owner and operator) was looking to bow out of the project. But Chevron denied that speculation yesterday, saying its commitment to the project was confirmed in the recent visit to Australia by key United States executives. September is shaping up as the critical month for the PNG-Queensland proposal. Until all the pieces of the puzzle are in place, the partners will not proceed with the $US60 million front-end engineering design work on the project, the project's technical go-ahead. And, without this go-ahead, the 3250-kilometre pipeline and its 2004 start-up date remain a pipedream of the proponents. A delay in the technical go-ahead would also open the door for would-be competitors in the Queensland market to beat their drums. Competitors include a rival proposal to bring Timor Sea gas to Queensland through the Northern Territory, and the burgeoning coal-bed methane gas sector. theage.com.au

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