PNG to Queensland gas pipeline

well down road to construction

THE AUDS3.7 billion Papua New Guinea to

Queensland gas pipeline

project has secured its foundation volumes with the signing of a preliminary agreement with state owned power utility Ergon energy to take up to 50 petajoules of gas a year for 20 years.

Queensland Premier Peter Beattie said the agreement will boost gas volumes to come via the pipeline to around 100 peta joules a year and to potentially more than 200 petajoules a year in the future.

He said the Ergon load, when coupled with the volumes under the Energex agree ment concluded two weeks ago, opened the way for gas proponents to now progress to the next stage of development.

“This $95 million stage will involve the front end engineering and design work and will progress in parallel with final approvals and financial close which is expected in the next 12 months,” Beattie said.

Ergon will act as an aggregator supply ing gas to major customers in north

Queensland, including Stanwell Corp’s

proposed gas-fired power station in Townsville.

“The supply of gas to the (north) region

will not only provide a clean source of elec tricity but will also assist to boost regional development,” said John Powell, the

pipeline’s project director.

Energex, also state-owned, signed a sim ilar agreement in late July to take up to 130 petajoules over 20 years to supply commer cial and industrial customers in Queens land’s south-east.

The agreements are subject to the approval of respective boards and share holding ministers.

Around 20 petajoules of gas has been allocated under the Energex tranche for the first stage of Comalco’s proposed alumina refinery in Gladstone.

Comalco is undertaking feasibility stud ies and is yet to decide on a site in Glad stone or one in Malaysia for the proposed

refinery.

Gas for the pipeline project will initially flow from the oil producing Kutubu and Gobe fields in the southern highlands of PNG and later from the Hides field, north west of Kutubu.

First gas is anticipated in late 2002 or

early 2003.

AGL and Petronas will build, own and operate the $1.5 billion pipeline stretching 2,500 kilometres from the PNG boarder to Brisbane.

AGE managing director Len Bleasel said work was continuing of finalising the

remaining administrative, planning and

regulatory issues.

These include making final decisions about the most satisfactory route to deliver gas into the Queensland market.

He said the contracts in north Queens land were important as they helped under pin the total economics of the pipeline.

“At this stage we believe financial close can be achieved by mid next year and then the pipeline could be completed by early in 2003,” he said.

Beattie, who was in PNG mid-August for the official signing of the Ergon agree ment, held meetings with PNG’s new prime minister Sir Mekere Morauta to dis cuss the benefits that would arise from development of the pipeline.

“Since Sir Mekere was elected PNG prime minister last month, he has wasted no time in coming up to speed with the project and one of his first official meet ings was with PNG gas proponents Chevron to discuss the project,” Beattie said.

Upstream participants in the project

include Chevron Niugini Limited, Oil Search Limited, and Orogen Minerals Limited. (AAP) ■