19 Sep 2005

Huge gas pipeline from PNG to Australia firms up potential key customer

8:20 pm on 19 September 2005

Participants in the three-billion plus US dollar Papua New Guinea-Australia gas pipeline project have struck an agreement with Comalco to sell it gas for use at facilities at Gladstone and Weipa in Queensland.

A conditional agreement reached with the aluminium producer covers the direct sale of up to 50.5 petajoules per annum over 20 years and supercedes a deal with Energex announced in July 2003, under which gas was onsold to Comalco.

ExxonMobil, whose subsidiary Esso Highlands Ltd operates the PNG gas project's facilities and infrastructure in PNG and markets the gas in Australia, said the new agreement did not involve any new volumes of gas.

But ExxonMobil said the PNG gas project was pleased that Comalco had committed to taking a substantial quantity of natural gas.

Rob Franklin, ExxonMobil's vice-president of new business development, says it is hoped the conditional arrangements would convert to binding sales contracts early next year.