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

To: Tomas who wrote (1230)	8/12/1999 8:04:00 AM
From: Tomas	Read Replies (1) \| Respond to of 2742

Bloomberg: Papua New Guinea Gas Pipeline Reaches Sales Target with Ergon Pact Brisbane, Aug. 12 (Bloomberg) -- Ergon Energy Ltd. has signed an agreement to buy natural gas from Papua New Guinea, meaning the US$3.5 billion project to pipe gas to Australia's Queensland state has met its sales target. The pact with Ergon, owned by the Queensland government, comes on top of an agreement signed last month with another state- owned utility company, Energex Ltd. Ergon signed up for as much as 50 petajoules a year, over 20 years, while Energex plans to take 130 petajoules per year. ``The gas producers have told the state government that the Ergon agreement means foundation volumes have been secured for the more than 2,000 kilometer pipeline to Queensland,' state Premier Peter Beattie said in a statement issued from Port Moresby, Papua New Guinea, where the pact was signed. Still, the owners of the gas in the highlands of Papua New Guinea, including Oil Search Ltd., Chevron Corp. and Orogen Minerals Ltd., don't expect to make a final decision to go ahead until the middle of next year, when financing, government approvals, and sales agreements, have been concluded. Ergon and Energex will take about 100 petajoules when the pipeline is completed late in 2002 or early in 2003, and potentially more than 200 petajoules in the future, the government said. The partners in the project have begun hiring 200 people as they start spending A$95 million (US$60 million) on engineering and design work on the pipeline. Oil Search shares fell as much as 1 cent, or 0.4 percent, to A$2.40. Orogen, a mining and energy company controlled by the PNG government, rose as much as 7 cents, or 3.9 percent, to A$1.89. quote.bloomberg.com

To: Tomas who wrote (1230)	8/12/1999 8:30:00 AM
From: Tomas	Respond to of 2742

Chevron closer to PNG gas pipeline. "The biggest hurdle was cleared today - customers have signed up on the basis that it will go ahead" By Diana Taylor BRISBANE, Aug 12 (Reuters) - Chevron Corp's Chevron Services Australia Pty Ltd said on Thursday it remained confident but cautious about the viability of its A$3.7 billion Papua New Guinea-to-Australia natural gas pipeline project. Chevron Services, operator of the project, earlier initialled in Port Moresby a preliminary agreement with the Queensland state government-owned regional electricity retailer, Ergon Energy, for the supply of gas. Ergon's initialling of the deal to take 50 petajoules of gas a year for the next 20 years came two weeks after state-owned umbrella electricity retailer Energex signed a preliminary contract to take about 130 petajoules a year for 20 years. And while the Queensland state government was on Thursday gushing in its enthusiasm for the 2,655 km project, Chevron told Reuters there was still many hurdles to pass before the project is considered viable. ``While this is a great milestone, there are still many things to finalise before we can call this a project,' Chevron Services manager of external affairs Cliff Leggoe told Reuters. Leggoe said some of those hurdles include the completion of front end engineering work, the granting of numerous government and financial approvals and licences and the ability of the project proponents to successfully put financing in place. Leggoe said while Chevron would fund its proportion off its balance sheet, other project proponents such as Oil Search Ltd , a 27.5 per cent shareholder in the giant Hides gas field, would need to raise money. Project operators have already poured US$50 million into the project and Leggoe said there is enough confidence for operators to rubber stamp another $50 million for front end engineering and design work. ``There are a lot of investors who want to put money into this project,' Leggoe said. ``We see no show-stoppers between now and financial close in the next 12 months.' The pipeline, which was initially to finish at Gladstone to take advantage of the gas requirements of a proposed A$1.2 billion Comalco Ltd alumina refinery, has now been extended to Brisbane, to take advantage of the southeast Queensland electricity market. Comalco, which was initially singled out as one of the main clients for PNG gas, has been slow to sign on. It is considering whether to locate the refinery in Gladstone or Sarawak, Malaysia. Comalco is expected to take about 27 petajoules a year. In something of a stand-off, project operators say they can proceed without Comalco because there is sufficient demand from other users to make it viable. ``We welcome the move and see it as positive in terms that it will increase the critical mass, but also regard (the Ergon signing) as only a preliminary agreement,' Comalco general manager of external affairs Geoffrey Ewing said. Ergon chairman Keith De Lacy said a large proportion of the 50 pj of gas was destined for the proposed Stanwell gas-fired power station in Townsville, but Ergon was talking with three other commercial entities about taking gas. Stanwell would sit next to a proposed A$1.2 billion zinc refinery being built by Korea Zinc Co Ltd , which last week told Reuters it saw the Energex signing as a positive move and had undertaken some preliminary talks about taking gas. ``We've done exhaustive analysis and see it could be a very profitable exercise for us. We are confident the potential reward justifies the risk,' De Lacy told Reuters from Port Moresby. "Listening today to suppliers and pipeline operators and you have to consider that the biggest hurdle was cleared today - customers have signed up on the basis that it will go ahead. ``We realise this is not the end of the road but the mood here is very optimistic.' Chevron said more than four trillion cubic feet of gas reserves are available from the Kutubu gas fields in the PNG highlands which would support 30 year contracts using more than 110 petajoules of gas. biz.yahoo.com