1 Feb 2007

PNG's planned huge gas pipeline to Queensland shelved

4:44 pm on 1 February 2007

The Papua New Guinea oil producer Oil Search Ltd has announced it is shelving its troubled multi - billion dollar gas project.

The project planned to pipe gas from the Southern Highlands to the Australian state of Queensland.

In a statement the company says the costs weren't attractive when compared with a number of other projects on offer, and the partners had decided to suspend work.

Oil Search's managing director, Peter Botten says it's clear that alternative development options, such as liquefied natural gas, petrochemicals and other in-country options, which were not present two years ago, are now demonstrably more attractive and cannot be ignored.

He says part of the problem is the energy prices in eastern Australia, where there are large volumes of competitively priced coal.