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

To: Tomas who wrote (603)	5/28/1998 7:56:00 PM
From: Tomas	Respond to of 2742

'Papua New Guinea has enough gas for North Queensland industry' The National, May 29, by DONALD OTTO PORT MORESBY: Papua New Guinea has enough gas reserves to power the entire North Queensland industry for more than three decades, Oil Search Ltd has said. "A volume of five trillion cubic feet sounds like a lot of gas. That is less than the estimated volume of gas reserves in Papua New Guinea. Put it into perspective, that is enough gas to quench the entire industrial power thirst of North Queensland for the next 30 years," the company's annual report says. The gas from PNG will flow through a 2,500-km pipeline to Gladstone devised by Oil Search and its joint venture partners, the names of which are yet to be announced. A 400-km portion of the pipeline will be under water. "This will be a very ambitious project with a start-up cost of some US$3.5 billion (K7.29 billion) and requiring a pipeline so long that it would utilise 80 per cent of the Japanese steel-making capacity for the next two years," the report says. Two potential pipeline consortia, AGL-Petronas and Nova-Williams, were recently selected for the final bidding process for the construction of the Australian portion of the pipeline. According to Oil Search chairman Trevor Kennedy, both are highly experienced groups, which have built and operated pipelines worldwide. The successful bidder, to be chosen in the second quarter of this year, will work with the project team on the ongoing technical and engineering studies required to complete the pipeline within the desired time-frame and to determine the tariff structure for gas transportation. Mr Kennedy added that significant progress had also been made in nurturing the relationship with Australian indigenous landowner groups with the signing of a heads of agreement outlining the active participation in the project by North Queensland indigenous groups. Although it was completely different from the usual agreements here, it would complement the existing arrangements for landowner participation here. wr.com.au _____________________________________________________ Cooperation 'key to gas pipeline project' The National, May 29, by DONALD OTTO PORT MORESBY: Jealousies, personal rivalries and other prejudices may thwart the gas to Queensland project, Oil Search Limited Chairman Trevor Kennedy told shareholders yesterday. Mr Kennedy called for greater cooperation between the joint-venture partners and the National Government if the US$3.5 billion (K7.2 billion) project to build a pipeline to export gas to Queensland is to succeed. "This requires all parties to put aside our petty jealousies, personal rivalries and general prejudices in the overall pursuit of delivering an outcome which will bring untold benefits to the people of PNG, and significant rewards for the shareholders of the corporations involved," he said. He said nothing will do more for the company and the country in the short term than a speedy arrangement to implement this proposal. Mr Kennedy said: "The project is massive. It's the biggest ever proposed for PNG and will involve capital expenditures of about US$3.5 billion ... it is not only plenty of infrastructure and jobs but the opportunities for downstream processing and availability of cheap energy which will be the basis for the nation's industrialisation. "Windows of opportunity such as this do not come along often. It will demand all the ingenuity, imagination, initiative, discipline and energy we can bring to the opportunity to deliver it." One such opportunity was the company's decision to spend US$400 million on acquiring the upstream assets of BP last month. Mr Kennedy described the purchase as the "momentous event" in the company's history since the discovery of oil at Kutubu. He said he was pleased that both the Government and Opposition were supportive of the deal which has enabled Oil Search to control: * One-third of the nation's oil reserves, * More than a quarter of Kutubu and its infrastructure, * Nearly one-third of the Moran Central oilfield, * More than one-half of the mighty Hides gas field, * Nearly a quarter of the Gobe Field, and * More than a quarter of the PNG to Queensland gas project. The news of the sale marked Oil Search's stock up appreciably against the soft trend in the oil sector. Mr Kennedy said yesterday the gas project would not be easy. "There is enormous competition in the gas market, which we have to meet and beat ... this requires us to be flexible and fast on our feet. It's not always easy when governments and big corporations are involved," he said. "We must understand that gas is not a scarce commodity - but markets for gas are scarce and the necessity to quickly capture them when they are available is paramount. That is our challenge." Nevertheless, he said the overwhelming importance and demands of the gas project have not diminished the significance of other projects. He said Gobe which was managed by Chevron was a major achievement in 1997, and this was due to a growing maturity on the part of the landowners. Production from Gobe is ahead of budget with and an active drilling program is continuing to ensure that the production target of 50,000 barrels per day is met. "Nobody sells the country more effectively, enthusiastically and energetically than Oil Search. We have nailed our colours to the mast," said Mr Kennedy. wr.com.au _____________________________________________________ Alfred Kaiabe, Chairman of The Southern Highlands provincial oil and gas task force, says: "The Japanese are interested in our oil and gas. The Japanese are gradually realising that we have gas reserves and are willing to buy our gas to power their industries," he said. Mr Kaiabe said the Japanese were interested in gas as they are trying to cut down on nuclear power. (SHP 'plans to buy oil refinery from Japan') wr.com.au