Hmmmmmm... But i was sure the pipeline wasnt going ahead... Oh!...

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