EXXON MOBILE GAS PROJECT

All I have to say is, the market that punished this company for the loss of a contract in Townsville due to a start date for the delivery of gas for 2005 and not what was perceived by many Analysts and to CH4 that have doubts over the delivery of the gas are out of touch with the real world, its a pity even today I read on a pay site that Oil Search is finished due to the Townsville project.
This is all old news now and the more I post articles like this from PNG the more I hope the message will get across that news will come through and this project is going to take off.
Traders must understand the complexity of these contracts and even through my frustrations I have been able to find out the truth.

Mobil confident on gas project

BRISBANE: Shares in Oil Search Ltd yesterday lifted almost 7 per cent after United States energy giant ExxonMobil said it was in advanced talks with potential customers in the long-delayed $US3.5 billion ($A6.42 billion) PNG-to-Queensland gas pipeline.
Oil Search, which owns a 37 per cent interest in the project between Queensland and the PNG highlands, lifted 6.85 per cent or five cents to 78 cents.
Project operator ExxonMobil yesterday said it was in advanced negotiations for sales of PNG gas which, if successful, would provide the volumes required for the pipeline project to proceed.
ExxonMobil yesterday said it was confident the PNG gas project’s pricing structure and commercial arrangements would make PNG gas the most competitively priced gas supply available in Queensland.
AGL, Australia’s largest gas retailer, has a conditional agreement with the PNG gas project to take between 40-50 petajoules per annum over 20 years, starting in 2006.
The 2006 start date coincides with the expiry of AGL’s long-term supply contracts with Santos for gas from the Cooper Basin.
ExxonMobil also yesterday hit out at pundits who claimed a consortium linked to the PNG pipeline lost the bid to supply the new baseload Townsville gas-fired power station because of cost.
Referring to the ABARE report Gas Supply and Demand Balance to 2019-20, released last Friday, ExxonMobil said key assumptions were flawed and had been made without consulting it.
“The recent announcement that the proposed Townsville gas-fired power station will be supplied by the Enertrade-CH4 consortium and not from the PNG pipeline illustrates the competitiveness of coal seam methane as an alternative source of supply in eastern Australia,” the ABARE report said.
ExxonMobil said the assumption failed to recognise there were factors other than price which influenced the State Government’s decisions.
“PNG gas was a commercially competitive option for the Townsville power station,” ExxonMobil said
“However, the Queensland Government saw the requirement for gas-fired power generation to commence in 2005 as a deciding factor.”
The PNG gas project expects to make its first deliveries in 2006.
Oil Search was recently punished by the market after a rival bidder`s consortium was chosen to supply the Townsville power plant.

Mark...