28 Jun 2005

PNG gas offer may scuttle Northern Territory project

4:03 pm on 28 June 2005

A huge gas pipeline project in Australia's Northern Territory may be dumped after a potential major user decided to used gas from Papua New Guinea instead.

The news agency AAP reports that Alcan has turned its back on the nearly 500 million US dollar project to pipe gas across the Territory to Gove on Cape York.

Under today's deal, Alcan is to buy 43.5 petajoules of gas a year for 20 years from the PNG Gas Project, from 2009.

The agreement - with project participants Exxon Mobil, Oil Search, MRDC and Nippon Oil Exploration - was expected to be finalised by December.

It involves building a three thousand kilometre pipeline from PNG's Southern Highlands to Queensland at a cost of around four billion dollars.