12 Sep 2006

Papua New Guinea reiterates support for the PNG Australia pipeline

8:27 am on 12 September 2006

Papua New Guinea's Petroleum and Energy Minister, Sir Moi Avei, has had to reiterate the government's support of the PNG to Australia gas pipeline project.

His comments come amid growing concerns from some proponents of the project with investors blaming escalating costs and infighting between pipeline players for the lack of activity in a project that's been on the drawing board for a decade.

Sir Moi explained to the Courier Mail newspaper, that the project to export gas from the Southern Highlands province to Brisbane, remained the backbone of the government's overall gas commercialisation strategy.

Konebada Petroleum Park will accommodate a gas-based petrochemical industry and a liquefied natural gas facility on the Gulf of Papua is to be developed.

Sir Moi says in 2005, the government set aside about 140 million US dollars from the budget to help fund the state's equity in it, with another 21 million US dollars allocated in the 2006 supplementary budget.

He acknowledged, however, that the viability of the project had been subject to increasing pressure due to escalating construction costs.