Papua New Guinea Pipeline sign-off expexted within 14 days
Sydney Morning Herald & The Age, September 25
By JANE COUNSEL
Final signing of finance and gas contracts for the $US3.6 billion ($A6.62 billion) Papua New Guinea-to-Queensland pipeline has been delayed, as project developers await clearance from the Australian Competition and Consumer Commission.
The deadline for submissions on the revised marketing arrangements for the 3250-kilometre pipeline passed yesterday with a decision from the ACCC expected within the next fortnight.
ACCC clearance is the final regulatory approval needed by the pipeline proponents before they can confirm gas contracts, secure finance and then move forward with the $US60-million front-end engineering design of the project, which has been planned for more than five years.
Last month Chevron, the United States oil giant heading the consortium of companies developing the project, said the project partners had given themselves until the end of August to have the critical aspects of finance in place.
But that deadline has come and gone and the ACCC involvement is now expected to delay the process until at least early October.
"Basically they can't do anything until they get that ACCC approval," one source close to the talks said.
The pipeline participants secured ACCC approval for joint marketing of gas from the PNG pipeline in December last year, but it became necessary to revisit that agreement with the ACCC after the finalisation of gas reserves at the Hides field in May, one of the fields that will feed into the pipeline.
A new marketing agreement was necessary to include Exxon and Santos, which have equity stakes in the Hides field along with PNG companies Orogen and Oil Search, which are also partners in the pipeline.
A new submission was only lodged with the ACCC on September 12, but the ACCC is believed to be hastening its decision to ensure as little delay as possible to the pipeline, which is aimed to be in production by 2004.
Major gas customer Comalco, which has already signed a preliminary agreement to buy gas from the pipeline consortium for its planned new alumina refinery, is believed to be unwilling to negotiate on final gas contracts until the ACCC approval is in place.
Talks with the PNG Government on the fiscal terms of the project are at an advanced stage and several discussions have already been held with Queensland government gas aggregators Energex and Ergon in an attempt to convert letters of intent into gas sales. |
