LOILY - pipeline from Papua New Guinea to Queensland, Australia
>>The economic viability of the field depends on the proposed pipeline from Papua New Guinea to Queensland, Australia, which is currently being promoted by Chevron and Exxon. The project is at an advanced stage, the final decision to go ahead is not far away.<<
Tomas, update from the local paper this morning thecouriermail.com.au
PNG gas line faces a $1bn withdrawal
Chris Griffith 04jan01
THE proposed Papua New Guinea gas pipeline, possibly the largest Australian project since the Snowy Mountain Scheme, has had another major blow.
A letter from the State Government suggesting a delay in building a gas-fired power station at Townsville may lead to a $1 billion expansion project abandoning its plan to generate its power from Papua New Guinea gas.
A lack of custom from QNI Pty Ltd, which is planning an expansion to refine West Australian nickel transported to Townsville, would be expected to further undermine the need for the pipeline.
QNI needs to have its power source in place for the project by 2003, but a letter in December from the Department of State Development suggests there could be a delay in commissioning the power station until 2004 or 2005.
The letter also indicated the Government had rejected two bids it commissioned from the Queensland Power Trading Corporation and the Stanwell Corporation for the station, but negotiations would continue.
Industry sources said that delay could tip QNI's hand and the company may now ditch its plans to generate power using natural gas from the proposed pipeline and instead stick with coal-generated steam and power. QNI is to decide what form of energy it will use by mid year.
Leading energy consultant John O'Brien, who has worked with one of the bidders, Stanwell, said industry had anticipated gas from on-shore sources would have allowed the power station to have operated from 2003.
Mr O'Brien said that without QNI's custom, the demand for gas from the Papua New Guinea pipeline and therefore the need for the pipeline was further endangered.
"It puts it in some degree of jeopardy," Mr O'Brien said.
He said QNI was expected to draw about 15 petajoules of gas from the pipeline. The pipeline project needed 110 petajoules of custom to be viable.
QNI yesterday said the timing of the power station would affect whether it would adopt gas or stay with coal.
A QNI spokeswoman said a gas-fired plant at Yabulu would be more efficient "but we can only consider gas if we are not economically disadvantaged".
The spokeswoman warned that the timing was crucial.
"Should we elect to proceed with the Yabulu extension project and if over-the-fence supply of steam and power is to be considered, it would need to be available by mid-2003."
Mines and Energy Minister Tony McGrady said neither he, Deputy Premier Terry Mackenroth, and probably Premier Peter Beattie had seen before yesterday the letter to the bidders from State Development which was written by a bureaucrat.
He was previously unaware of the possible delay in the power station to 2004-2005 and said the Government was "100 percent committed" to bringing gas initially to Townsville and then to other parts of the state.
The Government still had a target of requiring electricity producers to manufacture at least 15 percent of their power from gas by 2005.
Mr McGrady said he would meet interest groups in Townsville on January 11. |
