completuion of major sales contract with alcoa, page-4

Hmmm. I found the text from the ann. about the Alcoa deal also at the Bloomberg site. ONLY the article of Bloomberg's site is published at 11 July.
This makes the news a bit less interesting (i thought the deal was made because of the bigger chance of succes that was given from the previous drilling). What you also can read is that this deal not in special is made for the Valentine prospect, but for all projects. Obviously the deal was allready made before they even started drilling Valentine... the source is down under the article.

Ps/ i hold EMR



Alcoa Agrees to Buy Gas From Arc Energy in Australia (Update1)

By Angela Macdonald-Smith and Tan Hwee Ann

July 11 (Bloomberg) -- Alcoa Inc., the world's biggest alumina producer, signed an agreement to buy a potential A$1 billion ($860 million) of natural gas for its Western Australian plants from Arc Energy Ltd. as it seeks to widen supply sources.

The accord involves New York-based Alcoa making an upfront payment of A$40 million to fund exploration in the Canning Basin, Western Australia, Perth-based Arc said today in a statement. If completed as planned, a gas pipeline costing as much as A$500 million will need to be built, the company said.

Alcoa, Australia's biggest user of gas, is a member of the DomGas Alliance, a group of gas users in Western Australia lobbying the state and federal governments to intervene in the market amid a more-than-doubling in prices in the past year and a forecast supply shortage into next decade. Gas demand is set to double in the next six years within the state, where most fields are developed for export, which gets higher prices.

``The agreement made with Arc is a strong commitment by Alcoa to protect and maintain the economic viability and sustainability of its Western Australian operations,'' Alcoa said in an e-mailed statement. ``Existing and potential gas users have reported significant challenges in securing additional or new gas supplies.''

Shares in Arc rose as much as 6 cents, or 3.9 percent, to A$1.61 on the Australian Stock Exchange. They were at A$1.57 at 2:03 p.m. in Sydney.

Under the agreement, Alcoa will buy as much as 500 petajoules (471 billion cubic feet) of gas over 15 years from any discoveries made by Arc in the Canning Basin, Arc said in the statement, lodged with the exchange. The pricing of the deal is confidential, it said.

Drilling Wells

Arc is due to start drilling wells in the Canning Basin next month and plans to drill as many as 20 in the next three years. The first wells will test the Valentine and Stokes Bay prospects, which may contain as much as 1 trillion cubic feet of gas and 19 million barrels of liquids, Arc said. The earliest gas may be delivered to Alcoa is 2010, while 2011 is more likely, it said.

Export of gas from the Canning Basin would require the construction of the Great Northern Pipeline, running more than 630 kilometers (392 miles), Arc Managing Director Eric Streitberg said in a separate briefing document lodged with the exchange. The pipeline may be owns by an infrastructure company, or operated as a ``purely financial vehicle,'' he said.

Alcoa, which owns a stake in Western Australia's biggest gas pipeline, the Dampier-to-Bunbury line, can't yet say whether it may take a share in the Great Northern Pipeline, said Courtney Hoogen, a spokeswoman at Alcoa in Australia. The company produces alumina at the Kwinana, Pinjarra and Wagerup refineries, all in southwestern Australia.



Source: http://www.bloomberg.com/apps/news?pid=conewsstory&refer=conews&tkr=ARQ:AU&sid=asaPECuQx2JA