APC said it would call for tenders in March 2005 for a AUD $25 million FEED Program which will see work undertaken on engineering design, route selection, regulatory and financial viability assessments and environmental and native title clearance processes. The PNG pipeline project involves the development of a natural gas pipeline linking gas from the PNG Highlands to East Coast markets in Australia. The PNG Gas Project participants are targeting initial gas deliveries to customers from late 2008.
"This call for tenders reflects APC’s confidence with the level of commitment from the ExxonMobil led PNG Gas Project participants to successfully implement the gas project,” said AGL managing director Greg Martin.
"This highlights APC’s optimism that Eastern Australian gas markets will develop in a timely manner to enable the APC consortium, in conjunction with the PNG Gas Project participants, to reach financial close on the pipeline in 2006.”
The PNG pipeline project would provide significant strategic value to AGL by introducing new gas supplies from northern Australia, letting AGL increase its participation in the downstream energy sector. It would also provide AGL’s infrastructure management subsidiary Agility with the opportunity to build a major new revenue source, Martin said.
"A final investment decision will be undertaken at the completion of the FEED program, subject to the PNG Gas Project participants securing sufficient sales agreements to enable the project to proceed and APC concluding corresponding gas transportation arrangements with the PNG Gas Project participants," Martin said.
APC was selected as the preferred developer for the Australian component of the pipeline in April 1998 following an international competitive tender. In October 2004, APC and the PNG Gas Project participants executed a binding letter of intent that made APC responsible for designing, owning and operating the pipeline, as well as securing all project approvals in Australia.
The PNG Gas Project participants are ExxonMobil subsidiaries 39.4% (Esso Highlands Limited as project operator), Oil Search 54.2%, MRDC (PNG Company representing landowner interests) 3% and Nippon Oil Exploration Limited 3.4%.
