PNG Gas Project operator ExxonMobil said the loss of 10PJ targeted for use at Comalco’s Gladstone and Weipa, Queensland plants would not affect the project's outlook.
"Our marketing focus remains on converting our conditional arrangements to binding sales contracts capable of supporting a project sanction decision in early 2006," said Rob Franklin, vice-president of new business development at Exxon Mobil Gas and Power Marketing.
ExxonMobil said the new agreement supersedes that with Energex, signed in July 2003, and covered conditional sales of a range of from 14PJ to 50.5PJ a year for 20 years. All volumes are for use by Comalco in Gladstone and Weipa.
The deal does does not cover possible PNG Gas contracts to the Queensland Alumina Ltd (QAL) operation, also in Gladstone.
Comalco and its QAL partners are considering a 1 million tonne expansion for the plant, which is already the world's largest alumina refinery.
The sales potential could be as much as 45PJ.
According to a July report in Papau New Guinea's The National newspaper, the country’s planning minister Arthur Somare said QAL was very likley to do a deal with the PNG Gas partners.
"We have two particular customers there; one [Queensland Alumina Refinery] is shortly to enter into a full sales agreement, and they are taking up the reasonable size of the supplies that is going down to Australia," Somare said.
The other potential customer in Gladstone was Comalco, the newspaper said at the time.
Comalco’s partners in QAL are Alcan and Rusal. Alcan has already contractd to buy PNG Gas Project gas for its Gove, Northern Territory alumina refinery.
The PNG Gas Project participants are: Oil Search (54.2%); ExxonMobil (39.4% - Esso Highlands as operator); Nippon Oil Exploration (3.4%); and MRDC (3% - a PNG company representing landowner interests). Santos is believed to discussing a stake in the scheme.
The PNG Gas Project entails a pipeline from the PNG Highlands to Brisbane.Front-end engineering and design work has begun, and the partners are expected to make a final investment decision early next year.
The first supply of gas from the PNG-to-Queensland project is expected to reach Australia in 2009.
