Australia-PNG pipeline called off

Work on the PNG gas project, involving a 3,000-km (1,864-mi) gas pipeline from Papua New Guinea to Queensland and Northern Territory in Australia was halted at the end of January 2007. The $2.5 billion project, which was regarded as a potential export earning source for PNG, had been under development for more than a decade.
Feb. 21, 2007

Offshore staff

SYDNEY, Australia -- Work on the PNG gas project, involving a 3,000-km (1,864-mi) gas pipeline from Papua New Guinea to Queensland and Northern Territory in Australia was halted at the end of January 2007. The $2.5 billion project, which was regarded as a potential export earning source for PNG, had been under development for more than a decade.

Australia's Oil Search Ltd., one of the three sponsors of the project, says the Australian Gas Ltd. and Petronas consortium has withdrawn from building the Australian segment of the pipeline, the proposed subsea routes of which has been one of the main challenges.

There are apparently several viable options for commercializing the gas, according to Peter Botten, Oil Search managing director, including an export-oriented LNG plant, petrochemical plant, and methanol/DME plant being planned in PNG.

Oil Search, along with partners ExxonMobil and Nippon Oil Exploration, are confident of developing the reserves, initially estimated at 7 tcf.

2/21/2007

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