MIM signs PNG gas dealSunday 22 December 2002, 12:30PM The $6-7...

MIM signs PNG gas deal
Sunday 22 December 2002, 12:30PM




The $6-7 billion Papua New Guinea gas project took a significant step forward today after the disappointments of last week with MIM Holdings Ltd signing up to take gas to supply its Northern Territory zinc operation.

Executives from project owners ExxonMobil, Oil Search Ltd, ChevronTexaco, Japan PNG Petroleum and MRDC, a PNG company representing landowners, met in Texas in the United States on Friday and agreed to press ahead towards a development decision.

Brisbane-based diversified miner MIM Holdings today committed to take 25 petajoules per annum (PJPA) for 20 years from 2007 to supply its McArthur River lead/zinc mine.

The project partners, including operator ExxonMobil, remain confident of replacing the commitment void left when the nation's largest utility, Australian Gas Light Co (AGL), last week turned its back on PNG gas.

AGL, the project's foundation customer, has instead opted to take gas from the established Gippsland and Cooper Basins, supplemented by Queensland's Surat/Bowen Basins.



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ExxonMobil vice president, exploration, Bill Threlfall said the project remained alive, viable and actively seeking markets, despite the setback from AGL's decision.

"It's been a tough week for the project - particularly for Oil Search - but we're not totally out of the game and this announcement with MIM will hopefully help give us the credibility that the project is still alive," Mr Threlfall told AAP in an exclusive interview from Houston.

"We're still trying to make the project work without AGL and we believe it is still possible to make it go but it is going to be hard work."

To be commercially viable the project must sell more than half the pipeline's 200-210 PJPA capacity.

The consortium remains confident the project will have the volumes commitments necessary to make a decision on the $US50 million ($A88.59 million) to $US70 ($A124.03) Front End Engineering and Design (FEED) stage early next year.