Hmmmmmm... But i was sure the pipeline wasnt going ahead... Oh! Thats right! IT IS!!!!!!!!!!!!!!!!!!!
Media Release An ExxonMobil Subsidiary 19 August 2002 ABARE VIEWS ON PNG GAS FLAWED Brisbane - The ABARE Report "Gas Supply and Demand Balance to 2019-20" released on Friday 16 August for the Commonwealth Department of Industry Tourism and Resources makes two key assumptions in relation to potential gas supplies from the PNG Gas Project. Both assumptions are flawed and were made without consulting ExxonMobil. Assumption 1 "In this analysis, gas from the fields in Papua New Guinea's southern highlands is assumed to have a delivered price, in Queensland (Brisbane), of around $0.08 -0.44 per gigajoule above that assumed for Timor Sea gas..." page 21 This assumption is flawed. ExxonMobil is confident that the PNG Gas Project's pricing structure and commercial arrangements 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 (125 million cubic feet per day) over a 20-year period, starting in 2006. Any potential customer wishing to test the economics of PNG Gas should speak to ExxonMobil. Assumption 2 "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." Page 21 This assumption is also flawed. It fails to recognise that there are factors other than price which can, and in the case of Townsville did, influence government decisions. PNG gas was a commercially competitive option for the Townsville Power Station. 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. ExxonMobil is currently in advanced negotiations for sales of PNG Gas which, if successful, will provide the volumes required for the Project to proceed. ExxonMobil is disappointed that this ABARE report relies on flawed assumptions to reach commercially incorrect conclusions. ExxonMobil sees this as unhelpful in a commercial environment where customers are seeking informed market based solutions. The PNG Gas Project participants are ExxonMobil (Esso Highlands Limited as project operator), Oil Search, ChevronTexaco, MRDC (a PNG company representing landowner interests) and JPP (Japan PNG Petroleum). Media Contact: Anna Schulze 03 9270 3182 / 0408 532 589
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