Gas project could extend into NSW market

THE AUDS3.7 billion PNG Gas Project could eventual ly extend into the New South Wales market, project director John Powell said.

He told a Morgan Stockbroking break fast late August that the proposed project, which will initially stretch from the PNG gas fields to Brisbane, expected final go ahead by third quarter next year.

When asked whether the pipeline could extend beyond Brisbane into New South Wales Dr Powell said: “I can see quite a bit of logic for that happening.”

He said the pipeline could extend south from Brisbane or north from Newcastle to link up with Duke Energy’s proposed pipeline project.

“That is up to the AGL’s and Duke Energy’s of this world to decide,” he said.

AGL and Malaysia’s Petronas will build, own and operate the $1.5 billion pipeline

from the PNG border to Brisbane.

Dr Powell said the PNG Gas Project was not concerned about the Shell/Wood side Petroleum proposal to pipe gas from the Timor Sea into Queensland.

“They are probably three or four years behind us,” he said.

He said the PNG Gas Project operator Chevron would welcome the competition, because it should encourage greater use of gas.

“We’d like the market to grow and competition enables growth,” he said.

The PNG Gas Project expects to finalise the front end engineering and design work as well as reach financial close within the next 12 to 14 months.

Preliminary agreements were recently signed with the Queensland government owned power utilities Energex and Ergon Energy, securing foundation volumes of 180 petajoules.

“By the time we get to project approval we will have spent $lOO million,” Dr Powell said.

He said construction was expected to take about two-and-half years with first gas delivered in late 2002.

“We’re looking at ways and means of bringing that date forward,” he said.

Dr Powell said with good weather the pipeline could be built in less than two and-a-half years and near specification gas could be delivered to customers soon er.

He said there were also other opportu nities along the pipeline corridor where additional gas could be accessed, includ ing the Gulf of Papua New Guinea.

“I’m sure we will over time. We’ll be encouraging that is will be an open-access

pipeline.

“All that does is supply additional security to the customer,” (AAP) ■