ExxonMobil to supply gas for Papua New Guinea-Queensland line

US energy giant ExxonMobil Corp. has confirmed its entry into the Papua New Guinea-to-Queensland gas pipeline project with a formal agreement to dedicate natural gas reserves in Papua New Guinea's Hides field to the $3.5 billion (Aus.) project.

Apr 30th, 2000

Melbourne�US energy giant ExxonMobil Corp. has confirmed its entry into the Papua New Guinea-to-Queensland gas pipeline project with a formal agreement to dedicate natural gas reserves in Papua New Guinea's Hides field to the $3.5 billion (Aus.) project.

The agreement provides the basis for a secure supply of sales gas volumes to Queensland of up to 600 MMcfd for 30 years. Reserves from Chevron Niugini Pty. Ltd.�s Kutubu fields, while substantial, would not be sufficient alone to sustain supply in the long term.

ExxonMobil will join the pipeline project consortium with a possible 40% stake by virtue of its 47.5% interest in Hides. News of the supply agreement comes soon after Comalco Ltd. nominated Gladstone as the preferred site for construction of its new $1.5 billion (Aus.) alumina refinery, which is a probable customer for PNG gas.

Observers see the two events as an important step forward in underpinning both the supply and the market baseload for the pipeline project. The gas is scheduled to come on stream in late 2003.

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