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To: Tomas who wrote (1171)	7/4/1999 9:54:00 PM
From: Tomas	Respond to of 2742

PNG Gas project boost tipped - actual market significantly greater than expected PostCourier, July 5 AGREEMENTS with potential customers of the PNG Gas project were ''very close'' to being finalised, Petroleum and Energy Minister Sir Rabbie Namaliu said yesterday. He was speaking on his return from talks with the project partners and the Queensland Government in Brisbane. ''Not only am I very confident the necessary customer agreements will be concluded, I believe the actual market the project will service will be even greater than we had originally expected,'' he said. The Post-Courier understands that the project partners are expected to announce the signing of one of their major customers soon. Sir Rabbie said long-term agreements with customers in Queensland the electricity authorities and industrial users would give the green light for the K8 billion project to start. ''The market survey has confirmed the potential demand is significantly greater than original expectations, and that will lead to even greater revenue flows to the PNG Government, and greater benefits for landowners and provincial governments, over the expected lifetime of the project and beyond,'' the minister said. Detailed engineering works for the project are set to start next month, according to the project's external affairs manager Cliff Leggoe. The announcement last Thursday is further assurance by the developers for the project to start as planned. Added assurance comes with the approval of the draft environmental plan by the Government last week. It is understood the Department of Petroleum and Energy gave approval of the draft plan, with conditions and recommendations for further study before a final plan is submitted for approval by the minister. Mr Leggoe told journalists on a tour of the Southern Highlands oil fields last Thursday that the $US60 million engineering work, which will be undertaken by a joint venture between Kvaerner, Egis and Bechtel, will start on August 1. He said the work will start after customers are secured, possibly by the middle of this month. The main project schedules are for financial close in mid 2001 and first production in early 2003. Mr Leggoe said the developers and partners are confident these targets will be achieved. Resources and business writers from Australia and PNG were taken on a guided tour of the oil and gas fields, and production facilities to give them first hand information. The tour included visits to the Hides Gas project, the Kutubu production facility, and a fly-over of Moran and Gobe fields, which are expected to supply gas for the project. Agreement between Oil Search and Exxon in May to allow Hides gas to be used for the project removed market concerns over long-term supply issues. It also allowed the proponent to secure sales agreements with customers. Hides 4, drilled last year, substantially increased the Hides field reserves and extended the height of the proven vertical gas column to 1238 metres from the previous 890m from Hides 1 and 2. There are now adequate reserves in the field to underpin the project. postcourier.com.pg

To: Tomas who wrote (1171)	7/4/1999 9:57:00 PM
From: Tomas	Read Replies (2) \| Respond to of 2742

PNG: Agreements with gas customers "very close" to being finalised Accord with gas customers 'is near' The National, July 5 By KEVIN PAMBA PORT MORESBY: Agreements with potential customers of the PNG gas project were "very close" to being finalised, Petroleum and Energy Minister, Sir Rabbie Namaliu, said yesterday. Sir Rabbie was speaking on his return from discussions with the project partners and the Queensland government in Brisbane. "Not only am I very confident the necessary customer agreements will be concluded, I believe the actual market the project will service will be even greater than we had originally expected," Sir Rabbie said. He said long-term agreements with customers in Queensland - the electricity authorities and industrial users - would give the green light for the K8 billion plus project to commence. "The market survey has confirmed the potential demand is significantly greater than expectations and that will lead to even greater revenue flows to the Government and greater benefits for landowners and provincial governments, over the expected lifetime of the project and beyond," Sir Rabbie said. He said the discussions he and Petroleum and Energy Secretary Joseph Gabut held in Brisbane recently were easily the most productive and positive ever. "We also met with the deputy premier of Queensland, Mr Jim Elder, who confirmed his Government's commitment to the Project," Sir Rabbie said. "The same commitment has been given by the Australian government. "The cooperation between the three governments - PNG, Australia and Queensland - has been a most positive contributor to the project and the stage that has now been reached." Sir Rabbie said Oil Search, as the lead partner in the marketing survey with Australian Gas Light (AGL), which has been engaged to secure long-term customers, deserved every credit for the progress. Oil Search and Orogen are meeting most of the costs at present and should be commended for their efforts. Sir Rabbie also said that discussions for financing PNG's equity in the project are well advanced. He said the discussions with the Asian Development Bank (ADB) and with Japanese lenders including the Overseas Economic Cooperation Fund (OECF) for commercial and concessional financing had been positive. He said that once the customer agreements were in place, work on the project would proceed very rapidly. "This project will do more than any other to secure our economic future," said Sir Rabbie. "It will become the largest single revenue source for the National Government, it will give export income a much-needed long term boost and it will provide real jobs and training as well as business opportunities for our people." wr.com.au