More on the Papua New Guinea project.
Razor: Thanks a lot, I appreciate your valuable insights. It was certainly more helpful than confusing <g>.
From Australian Financial Review and The National (Papua New Guinea):
Mitsubishi Oil will team up with Chevron to lay a 1,550 miles (2,500 km) pipeline to connect natural gas fields in Papua New Guinea with Australia. The pipeline will run from Chevron's joint venture gas field in Kutubu, via Cape York to customers in Gladstone, via Townsville. The pipeline will transport LPG from Papua New Guinea to power plants and aluminium oxide plants in Eastern Australia. Construction of the pipeline will start at the end of 1998 after the partners set up a construction and operation company for the pipeline.
Chevron's project director for the pipeline, John Powell, said the speed with which its gas pipeline is built depends on how soon it can secure customers. If customers could be secured by the end of 1997, the pipeline would be up and running by 2001. Powell said the tightness of the deadline was driven by the fact that pipeline builders would need customers in place in order to get the project financed. He said that the pipeline builder was likely to own at least 51 percent of the pipeline. A decision on the builder of the pipeline is expected by September or October.
Austrade's senior trade commissioner for Papua New Guinea, Mr Steve Ryan, said "If the gas pipeline goes ahead, it will have far-reaching effects on North Queensland and Papua New Guinea. In the longer term, the pipeline will deliver electricity to North Queensland at rates of 40 per cent less than current costs of electricity, providing a strong financial incentive for direct investment into the area."
The pipeline, which will run underwater in Torres Strait and then overland from the tip of Cape York, is expected to take 18 months to build and is likely to be operating by 2000 or 2001. "By moving gas from the Kutubu site, Chevron would be able to reach new oil reserves deposited below the gas-line", Mr Ryan said.
Comalco Ltd and Chevron have agreed to pursue the possible joint development of $4 billion of projects in North Queensland, including Comalco's proposed alumina refinery near Gladstone and Chevron's ambitious Papua New Guinea-to-Australia gas pipeline. The Federal and Queensland governments are expected to support the agreement. Neither project is considered self-supporting. The alumina refinery needs a large, low-cost source of natural gas to make it viable, and the pipeline requires a large gas customer in the Gladstone region to help underwrite the cost.
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