Sydney, Feb 9, 2006 AEST (ABN Newswire) - The Australian Gas Light Company (ASX: AGL) today announced power company Flinders Osborne Trading Pty Ltd (NRG Flinders) in South Australia as its first customer to purchase gas from the Papua New Guinea Gas (PNG) Project.
NRG Flinders has agreed to acquire more than 100 petajoules (PJ) of gas from AGL to meet its requirements at the 180 megawatt (MW) Osborne Cogeneration Plant in Adelaide. AGL and NRG Flinders have negotiated binding terms for the on-sale of PNG gas acquired by AGL from the PNG Gas Project.
The existing gas supply contract between AGL and NRG Flinders, which runs until the end of 2010, has been extended until the end of 2018 conditional upon the PNG Gas Project proceeding.
"This is a significant first customer for AGL using gas from our PNG contract and reflects the important role for PNG gas in providing an alternative source of competitively priced energy," AGL Managing Director, Greg Martin said.
"AGL is committed to providing competitive energy to our customers in South Australia through this sale which follows the announcement to build a 95 MW wind farm at Hallett, 220 kilometres north of Adelaide. The wind farm will be located adjacent to AGL's existing 180 MW gas-fired peaking power plant at Hallett.
"In addition, AGL will call for construction tenders for the proposed expansion of the peaking plant at Hallett. This additional generating capacity of up to 250 MW will take total gas fired capacity up to 430 MW. A final investment decision on the expansion will be made in the second half of this calendar year," Mr Martin added.
AGL already has a binding Sale and Purchase Agreement to buy 1,500 PJ from the PNG Gas Project over 20 years. Gas provided by the PNG Gas Project will be integrated into the AGL wholesale portfolio to supply existing retail and industrial customers across Eastern Australia such as NRG Flinders as well as developments such as the 370 MW Townsville Power Station.
"The PNG Gas Project will provide greater flexibility to AGL's wholesale gas portfolio, which will ensure that AGL can continue to provide competitively priced gas to its customers as well as underwriting the development of power generation initiatives in expanding markets such as Queensland," Mr Martin concluded.
AGL's current involvement in the PNG Gas Project includes:
Being selected as the preferred developer, together with partner Petronas Australia Limited, to build the Australian component of the natural gas pipeline from PNG to Queensland;
Investing $67 million into the Front End Engineering and Design (FEED) process for the Australian component of the pipeline;
Purchasing 1,500 PJ of gas valued at around $4.5 billion over 20 years; and
Acquiring 10 per cent of the PNG Gas Project and associated oil and gas reserves from Oil Search for around $US400 million ($A530 million).
The NRG Flinders gas contract is managed by the Merchant Energy business which will become part of AGL Energy if the proposed demerger of AGL is approved by AGL Shareholders in March 2006.
Contact
Media
Contact: Jane Counsel, Media Relations Manager
Direct: + 61 2 9921 2352
Mobile: + 61 (0) 416 275 273
E-mail: jcounsel@agl.com.au
Investors
Contact: Graeme Thompson, Head of Investor Relations
Direct: + 61 2 9921 2789
Mobile: + 61 (0) 412 020 711
Email: gthompson@agl.com.au
| ||
|
