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

To: Tomas who wrote (868)	12/1/1998 6:55:00 PM
From: Tomas	Respond to of 2742

Papua New Guinea-Queensland pipeline 'project at make or break point' The National, Wednesday December 2 SYDNEY: The proposed PNG-Queensland gas pipeline project is nearing make or break time with sponsors warning potential customers that now is the time to sign more definitively on the dotted line. Project organiser John Powell, of Chevron Niugini, said while aluminium concern Comalco no longer held a stranglehold over the project, commercial sales agreements with foundation customers needed to be signed before the end of the month to keep it on track. A yearly demand of 100 to 120 petajoules of gas has been determined as necessary for the A$3.5 billion (K4.7 billion) gas pipeline to go ahead and Comalco's possible Queensland-based refinery, which would take up about 27 petajoules of gas, had been considered a vital part of the plan. Sponsors have told the fourth PNG mining and petroleum investment conference here that was no longer the case with commitments from five customers taking the total to between 130 and 140 petajoules of gas per year. The problem is those customers have signed memorandums of understanding only to use the resources carried by the pipeline from the Highlands to Gladstone in Queensland and hard contracts still needed to be tabled. All those involved in the project have sent the same clear message to potential customers over the two-day conference: Now is the time to act. Petroleum and Energy Minister Sir Rabbie Namaliu referred to a "window of opportunity" that should not be squandered as it might not reappear for some time. The Australian Gas Light Company, which is in a 50/50 joint venture with Petronas to construct and operate the A$1.5 billion, 2,100 km Australian stretch of the pipeline, said: "Prospective players, the game is now in your hands." Dr Powell expressed confidence that those companies which had already signed memorandums of agreement regarding the pipeline, including Comalco, would commit further. "I am quietly confident that those charged with the big decisions will say yes to the PNG gas project," he said. Dr Powell added that Comalco's role in the project was no longer as crucial as it once was. An increase in the number of potential buyers over the past year had drastically changed the mentality of "No Comalco, no project", he said. "The marketplace that has emerged over the past year is no longer the diverse group of unrelated buyers that put their hands up, various players are now becoming part of a coherent network of electricity suppliers and metal processes," he said. Comalco is currently in the process of determining whether to go ahead with its A$1.4 billion alumina refinery at Gladstone in north Queensland or to situate it in Malaysia. "I understand that the (federal) government is on the brink of releasing a package of incentives for Comalco which should crystallise the decision making for this major potential customer," Dr Powell said. MOUs have also been signed with Stanwell/Dynegy for a base load power station in Townsville and with power producer NRG Asia Pacific for a new power station in Gladstone. Dr Powell said those combined should take around 65 petajoules a year. AGL-TransAlta has announced a 20 petajoule gas requirement plant adjacent to Queensland nickel and Dr Powell said Chevron was also talking to Queensland Aluminium and Ergon about similar volumes. "We would like to see all of those converted into bankable heads of agreement then sales contracts as soon as possible," he said. While the timetable to resolve fiscal aspects by mid-December and have bankable contracts in place by the end of December was "very challenging", it needed to be met to enable final approvals in the next six to eight months, he said. Oil Search Ltd managing director Peter Botten has told the conference the project might be extended as far as Brisbane and discussions with potential customers in that area were underway. "We are at an advanced state in this process and the delivery of material volumes of gas into other markets, including Brisbane, is now a reality," Mr Botten said. For PNG, the project comes amid a decline in oil drilling and exploration, providing much needed diversification. "The gas project itself will come at the right time when oil production is on the decline and exploration does not result in any discoveries," Sir Rabbie said. The pipeline would guarantee a regular income for PNG in the light of declining Australian aid which had been provided to the country since it achieved independence in 1975. Some A$300 million a year in taxation revenue is expected to be provided to PNG, along with 2,500 jobs during the construction phase and some hundreds when the project was up and running. "Above all else, it will give a real boost to investment confidence in Papua New Guinea," Sir Rabbie said. - AAP wr.com.au

To: Tomas who wrote (868)	12/13/1998 10:26:00 PM
From: Tomas	Read Replies (1) \| Respond to of 2742

Partners in the proposed Papua New Guinea to Queensland gas pipeline are expected to finalise negotiations on the integration of gas from the various fields by the end of the week. Such a move would see explorer and producer Oil Search diluting its interest in the overall project from about 35 per cent to 25 per cent through the sale of part of its Hides stake. According to Morgan Stockbroking, this dilution by Oil Search could yield proceeds in excess of $US80 million. The brokers have conducted a positive review of Oil Search and are recommending it as a buy stock. ... The price implies a discount for PNG Gas uncertainty and low oil prices. We consider the discount to be too high considering positive news to come and the strong EPS (earnings per share) growth even if oil prices stay flat. ''Oil Search remains our top pick of the larger oils,'' the firm reported in its update for the week ending December 9. The broking house also reported gas rationalisation talks were proceeding and were expected to be resolved by the end of this week in the USA, with an announcement early next week. It is understood Chevron is negotiating with Oil Search and Exxon for a big share of the gas from the Hides fields to be included in the pipeline project. According to Morgans, pressure on Comalco to commit to its alumina project in Gladstone has increased. It is expected the State and Commonwealth benefits package, worth about $A230 million, may be re-directed to other potential participants if Comalco does not initially participate. Morgans expected Oil Search to deliver a stream of positive news over the next few months based on its development projects. ''Moran oil and PNG Gas to Queensland will result in outstanding production growth, which converts into strong EPS and CFPS growth even if the oil prices stay flat. ''We acknowledge the risks associated with the PNG to Queensland Gas project it is not a done deal yet. However, based on the positive political, economic and environmental aspects of the project, we strongly believe it will proceed to go ahead in first quarter ¨1999, even if Comalco does not commit. PostCourier, Port Moresby, Monday December 14 postcourier.com.pg