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Gold/Mining/Energy : Lundin Oil (LOILY, LOILB Sweden) -- Ignore unavailable to you. Want to Upgrade?

To: Greywolf who wrote (1170)	7/4/1999 9:24:00 PM
From: Tomas	Read Replies (2) \| Respond to of 2742

Papua New Guinea: $3.7bn pipeline edges closer - Sydney Morning Herald, July 3 By KATE ASKEW, Resources Writer Partners in the $US2.5 billion ($3.75 billion) Papua New Guinea-to-Queensland gas pipeline project are preparing to proceed on the project's $90 million design phase as soon as next month, as it moves closer to getting the green light. PNG gas project spokesman Mr Cliff Leggoe said in Port Moresby yesterday that the project's partners were optimistic about progress that had been made with customers. "We're encouraged by current negotiations with the market," he said. But, he added, the owners were not prepared to commit to the $90 million design phase until formal sales contracts were signed. The project has several memorandums of understanding in place for gas sales, but heads of agreements are still to be signed. The process of signing up formal agreements had been slowed by the drawn-out negotiations on the integration of the Hides gasfield with the gas project. That process was concluded in April. PNG's Minister for Petroleum and Energy, Sir Rabbie Namaliu, has been in Brisbane this week, along with the project leader Dr John Powell. Their involvement with negotiations has prompted intense speculation in PNG that potential gas customers were close to being signed. Signing formal heads of agreements with customers all the way from Gladstone to Brisbane will finally give the partners the backing to commit to the project. The Queensland Government is also heavily involved in the negotiations through its energy provider, Energex. For the PNG Government, the go-ahead for the project has the potential to provide annual income of $US120 million - at a time when its budget is in deficit to about 132 million kina ($74 million). The director of the petroleum division of the PNG Department of Petroleum and Energy, Mr Paul Tiensten, said yesterday that the project would account for one-third of PNG's gross domestic product when it was up and running. He said that with PNG's oil reserves forecast to deplete by 2010, the gas project would ensure the country's petroleum industry survived. The pipeline project was the only means of commercialising PNG's gas reserves. At the same time as sales negotiations move into top speed, a delegation of pipeline participants, including representatives from the PNG Department of Petroleum and Energy, Oil Search and Orogen Minerals, spent the last week abroad, seeking indications of interest for low-cost loans to fund the PNG portion of the pipeline infrastructure. With the newly started National Gas Corporation keen to take a stake in the pipeline itself - in the same way that AGL and Petronas have the build-own-operate agreement to build the Australian portion of the pipeline infrastructure - it is expected that the original project sponsors may offload some of that portion of the project. They will maintain their exposure through ownership of the gas. Chevron Niugini will remain operator of the pipeline. smh.com.au