3 Feb 2006

Reports PNG pressured to give Australia gas

11:16 am on 3 February 2006

A report has indicated that Papua New Guinea's government may be under pressure to give most of its raw gas from its Queensland pipeline project, to Australia.

PNG would then miss out on revenue because it lacks an onshore processing facility.

The Post Courier reports proponents of the gas project - including Oil Search Limited, Exxon Mobil and Australia Gas Light Company - had proposed to export 100 per cent of natural gas liquids for processing in Australia at 1999 and 2000 prices.

A source from the Department of Petroleum and Energy said that would deprive PNG of current market value for its NGL.

Gas prices have shot up 450 per cent since 1999.

In the US, the average well-head price of natural gas in 1998 was US$1.89 as compared with $US12.15 last month.