Just came from these pipeline jokers but this comment is...

Just came from these pipeline jokers but this comment is questionable ....."AGL pulled out in December, opting for more competitively priced local gas."

ie Was it anything to do with price? Don't think so. It was more to do with opportunism driven especially by concrete certainty of supply and this came at a higher price to PNG gas.




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Monday 20 October 3:55 PM


PNG gas pipeline seen stalled until 2009 or 2014

MELBOURNE, Oct 20 (Reuters) - The troubled $3.5 billion gas pipeline project from Papua New Guinea to Australia will likely be stalled until 2009 or even 2014 due to a lack of customers, industry officials said on Monday.

The Exxon Mobile XOM.N-operated project has struggled for six years to sign up enough sales to underpin the construction of the 3,200-km (2,000-mile) pipeline which needs to begin next year if the first gas deliveries earmarked for 2007 are to be met.

But Epic Energy, Australia's biggest gas transmission company, and the Australian Petroleum Production and Exploration Association (APPEA) said the loss of the project's cornerstone customer, the Australian Gas Light Co AGL.AX, would set the project back even further.

"Removing AGL from the market makes it more difficult for a large bore pipeline to immediately make an inroad into the market," Ian MacGillivray, Epic Energy general manager commercial and project development, told a conference in Melbourne.

"The critical mass for such a pipeline then, has now been pushed back probably until 2009, maybe 2014," he added.

AGL pulled out in December, opting for more competitively priced local gas.

APPEA Executive Director Barry Jones said local gas would continue to pose a threat to PNG even though a new gas source was needed to service Australia's eastern states from 2010 to 2020.

"You can't underestimate the possibility of finding more gas in the Gippsland, Otway or the Cooper basins. If we find more gas there, that pushes out the demand/supply further and further out," Jones told Reuters on the sidelines of the conference.

There are six trillion cubic feet of gas reserves in the PNG fields and the project has so far signed up potential sales of 84 to 135 petajoules (79 to 127 billion cubic feet) a year.

But Exxon Mobil says 100-150 petajoules is needed to begin the engineering and design phase.

Australia's Oil Search (ASX: OSH) has a 51.36 percent share in the project. Other stakeholders are Nippon Oil Corp 5001.T unit Nippon Oil Exploration Ltd and the Mineral Resources Development Co, which represents landowners.
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