re: 3.25 why Maybe this explains why.AGL announcement this...

re: 3.25 why Maybe this explains why.

AGL announcement this morning

Proposed PNG Pipeline Project
AGL has agreed with its joint venture partner Petronas to scale back its Front End Engineering and
Design (FEED) activities on the Australian component of the proposed PNG to Queensland gas pipeline,
with AGL deciding to write-off $25.1 million pre tax in FEED costs incurred to June 30, 2006 as a
significant item.
AGL Managing Director Paul Anthony said that high-level discussions had been held on the status of
the project with the Exxon Mobil-led PNG Gas producers and APC partner Petronas on Monday and
Tuesday of this week.
“On the basis of discussions with the PNG Gas producers and the continued lack of committed
foundation gas load in an environment of continually escalating construction costs, AGL and Petronas
have decided to scale back FEED activities. The majority of the budgeted FEED activities have now
been completed.
In AGL’s view the PNG pipeline project is unlikely to proceed without an alternative ownership
structure for the pipeline however AGL is continuing discussions with the Exxon Mobil-led upstream
Gas producers to explore all avenues to bring PNG gas to market while remaining a committed
foundation customer for PNG gas,” Mr Anthony concluded.
AGL Wholesale Gas Portfolio
“AGL is of the firm belief that PNG gas will play an important and strategic role in meeting future
energy demand in Eastern Australia. AGL is a strong financial supporter of the development and
continues to believe that Eastern Australia represents the natural economic destination for these gas
reserves.
AGL continues to pursue previously announced power generation projects in Queensland at Townsville
and Mt Isa. AGL remains comfortable with its existing wholesale gas contractual arrangements and its
recently announced 50 per cent acquisition of the Moranbah Gas project in Queensland which is
expected to be completed next week.