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To: Tomas who wrote (1234)	8/12/1999 5:34:00 PM
From: Tomas	Respond to of 2742

PNG gas pipeline closer to go-ahead - The Australian, August 13 By DAMON FRITH and JOHN MACLEAY THE $5.4 billion Papua New Guinea gas pipeline took another leap towards formal go-ahead yesterday after securing another big customer. Queensland government-owned Ergon Energy signed an agreement to buy up to 50 petajoules of gas a year. Another government-owned utility, Energex, last month signed up for 130 petajoules a year. When the idea was first floated a few years ago, the PNG pipeline partners, led by Chevron, estimated that at least 100 petajoules of demand would be needed to underwrite the cost of the project. "It looks like there is now sufficient load to justify the pipeline," said AGL managing director Len Bleasel. AGL and its joint venture partner Petronas of Malaysia have been appointed to build the Australian section of the 2500km pipeline. Mr Bleasel yesterday confirmed the line would be extended from its original destination of Gladstone to Brisbane, supplying gas to the Energex-owned Allgas metropolitan network. The gas would come from the Kutubu-Gobe and Hides gas fields in PNG's Southern Highlands with first gas forecast to flow in late 2002. All parties involved in the project, from customers to landowners to developers, met yesterday at Port Moresby to witness the signing of the Ergon agreement. The development partners ? Chevron, Merlin Petroleum, Oil Search, Orogen Minerals and Petroleum Resources ? also approved the next commitment of $US50 million ($77 million) to the project. From Port Moresby, project spokesman Cliff Leggoe said the $US50 million would allow completion of detailed engineering studies and issues involved with development licences, landowners and financing. "Until it's all in place you haven't 100 per cent got a project," he said. Project director and Chevron executive John Powell said: "We welcome the initialling of this gas sales agreement with Ergon Energy. Base load power generation in Townsville is long overdue." Mr Powell said the pipeline would generate regional development, much as the Eastern Gasfields pipeline had facilitated new projects in Western Australia. theaustralian.com.au

To: Tomas who wrote (1234)	8/12/1999 5:57:00 PM
From: Tomas	Read Replies (1) \| Respond to of 2742

PNG: "The pipeline project is now a virtual certainty" - Sydney Morning Herald, Friday Aug.13 Enron signs up for PNG gas; pipeline plan firms By KATE ASKEW and ANTHONY HUGHES The Queensland Government's Ergon Energy yesterday signed up for 50 petajoules of gas from the $US2.5 billion Papua New Guinea-to-Queensland gas pipeline, in the process underpinning the project by providing the baseload gas requirement. It also firms up the planned extension of the pipeline to Brisbane markets, beyond the originally planned finishing point of Gladstone, with both Energex and Ergon Energy having signed up for a total of up to 170 petajoules of gas over a 20-year period. Yesterday's announcement now enables the project participants to move ahead with their individual financing arrangements, at the same time completing a $95 million engineering and design phase. Those processes are expected to be finalised within 14 months but the starting date for first gas from PNG has been pushed back from 2002 to 2003. AGL managing director Mr Len Bleasel said the project was aiming for financial close in the third quarter of next year. "That still allows us to complete the pipeline construction and have gas delivered into Queensland in 2003," Mr Bleasel said. AGL also indicated that it was hopeful of securing customers to justify extending the pipeline from Gladstone to Brisbane. "There is new load being identified in the Brisbane market sufficient in size for us to be comfortable starting the planning process," Mr Bleasel said. He would not identify these customers but said talks were under way with three significant customers. Nevertheless, the pipeline project is now a virtual certainty, with the financing and ownership structure of the PNG section of the pipeline the most pressing task for the owners. Negotiations have begun with the PNG government-owned National Gas Corp to take a major part in the local section of the pipeline and members of the PNG Department of Petroleum and Energy have begun discussions with various financing bodies. Any increase in the involvement of the PNG Government reduces the financing requirement for the gas owners, Chevron Niugini, Oil Search, Orogen Minerals and Merlin Petroleum Co. Yesterday, Orogen Minerals reported a 257 per cent rise in first-half net profit to $48 million, boosted by a one-off gain from the depreciation of the PNG kina, demonstrating the company's ability to deliver its portion of the funding for the pipeline project. The PNG-to-Queensland pipeline infrastructure has already been signed for under a build-own-operate deal with a consortium involving the Australian Gas Light Company and Malaysia's Petronas. These partners will now be able to finalise their funding. smh.com.au

To: Tomas who wrote (1234)	8/13/1999 12:17:00 PM
From: Tomas	Respond to of 2742

PNG-Queensland Gas Project - From Orogen Minerals' half year report, August 12 During the first half of 1999, intensive efforts continued on a range of fronts directed at advancing the PNG -QLD Gas Project to a stage where all stakeholders would be prepared to commit to the project. The key areas of activity were as follows: Market Definition - Negotiations on the terms of conditional Gas Sales Agreements with two Queensland.Government owned corporations, Energex and Ergon, negotiating on behalf of customers located in the north and south of the state respectively, were materially advanced. Subsequent to the end of the quarter on 27 July 1999, agreement was reached with Energex on terms for the off-take of up to 130 petajoules of gas per year for supply to a number of industrial, commercial and domestic customers in south eastern Queensland. These customers included Tarong Energy, Comalco, Sithe Energy and CS Energy. On 12 August 1999, a Conditional Sales Agreement with Ergon was initialled by the respective parties adding materially to the contracted demand for PNG gas by Queensland customers. With the initialling of these agreements with Energex and Ergon, which are subject to approvals by respective boards, off-take commitments of sufficient quantity and price have been secured to ensure the commercial viability of the PNG-QLD Gas Project. Project Infrastructure - Development of innovative ownership and financing structures has been successfully undertaken during the quarter. Project Sponsors are expected to select and start implementation of a preferred structure during the third quarter of 1999. In addition to work on commercial arrangements for the development of PNG infrastructure, efforts during the remainder of the year will focus on the following activities: * PDL 1/PDL 2 Cooperative Development Agreement - Formal agreements between the participants in the project need to be concluded to provide a cooperative framework for developing and operating the gas fields. As a result of these negotiations, final ownership interests and attendant financial obligations will be determined. * Access Approvals - Agreement needs to be reached with the PNG Government and landowners on the specific terms of development of the PNG-QLD Gas Project. Compensation agreements with Australian landowners also need to be finalised based on the Heads of Agreement that have already been executed. * Front-End Engineering - Advanced planning and preliminary design of all elements of the Project needs to be undertaken and contract packages prepared. This will include preparation of detailed project capital and operating expenditure budgets. Orogen Minerals, August 12 orogen.com