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

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To: Greywolf who wrote (961)	4/13/1999 12:46:00 AM
From: Tomas	of 2742

Good news from Papua New Guinea: The pipeline project can now move forward! The key hurdle has been cleared. Gas reserves deal a boost for $5.5bn pipeline Sydney Morning Herald, Tuesday April 13 By KATE ASKEW, Resources Writer Sponsors of the $US3.5 billion ($5.5 billion) Papua New Guinea-to-Queensland pipeline are expected to announce as early as tomorrow completion of the integration of its gas reserves. The integration clears a key hurdle preventing the project from moving forward. The deal has been the subject of intense speculation during the past month, with investor scepticism increasing due to the lack of hard news. Nevertheless, a deal is understood to have been reached between owners of the Hides gasfield - Exxon, Oil Search and Santos - and partners in the Kutubu oil and gasfield. The conclusion of the reserves integration follows a difficult period of protracted negotiations that moved between the US, Queensland and PNG. It began in earnest when Santos agreed to buy part of Oil Search's interest in Hides in early February for as much as $US90 million. Integration of Hides gas with gas from Kutubu is vital in building the reserves to a level needed to provide enough security and longevity of supply to satisfy potential customers. The pipeline's key potential customer, Comalco and its proposed alumina refinery at Gladstone, had said publicly that it would not commit togas contracts with the PNG pipeline sponsors until the reserves integration had been completed. Tomorrow's expected announcement will clear the way for Comalco to make a decision on its alumina refinery - which has been another area of intense market speculation and scepticism. Comalco has previously said it expected to be in a position to make a formal announcement on the refinery by mid-year. The Brisbane-based miner will receive about $100 million worth of infrastructure incentives from the Federal Government if it agrees to push ahead with the project at Gladstone. _______________________________________ Comalco has yet to decide between a site in Gladstone, Queensland or one in Malaysia. It is playing off the respective governments for the best deal. Despite the posturing by Comalco, the Gladstone option is expected to win out. A commitment to Gladstone would also go a long way ensuring the development of the $3 billion PNG-Queensland gas pipeline by the Chevron-led consortium. smh.com.au (The last 2 paragraphs copied from smh.com.au )

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