PNG gas to fuel Qld’s mineral growth

THE Australian Gas Light Co has signed a joint development agreement with the Queensland Government’s utility company, CS Energy Ltd, to upgrade a 325-megawatt gas-fired Mica Creek power station in Mt Isa.The AGL announcement yesterday was a boost for the Papua New Guinea gas project because the current gas supply contract for the power station runs out in 2010 after gas supplies from PNG become available.AGL is a partner in the PNG Gas Project as well as a significant gas customer, having signed a purchase contract and announced plans to utilise PNG gas for a new power station it plans to build in Townsville.The two companies said yesterday that under the joint agreement, AGL would take the lead role in procuring and transporting the additional long-term supply of gas for the power station. This would be sourced as part of AGL’s wholesale gas activities, it said.“CS Energy will oversee the redesign and re-powering study and will operate the upgraded Mica Creek station which is planned to be expanded by 70 to 100 megawatts at a projected cost of A$150 million (K362 million) to A$200 million (K482.7 million),” the two companies said.The power station would cater for increased growth in electricity demand caused by anticipated development of the Carpentaria Minerals Province near Mount Isa.AGL’s managing director Paul Anthony said the agreement with the Queensland government’s largest government-owned generator secured a platform for growth for both companies.He said this included the 370-megawatt gas-fired power station in Townsville and the proposed gas pipeline from PNG, being built by AGL and Petronas Australia Ltd.CS Energy’s chief executive Mark Chatfield said AGL had the ability to secure competitively priced energy after 2010.