Australian firm seeks partners for pipeline -

SYDNEY: Australian Pipeline Trust, a Sydney-based owner of natural gas pipelines, said Wednesday that it received "positive" responses from potential overseas partners to build a pipeline from Papua New Guinea to Australia.
The company has contacted some "major international" pipeline companies with the view to forming a venture that may replace an AGL Energy-led group to build and own the Australian part of the pipeline, the company's managing director, Mick McCormack, said Wednesday in a briefing document filed with the Australian Stock Exchange. He declined to name the companies.
AGL Energy said in August it was no longer interested in building the 4 billion Australian dollar, or $3.1 billion, Australian part of the pipeline because it was not economically viable amid rising construction costs and a lack of customers. Oil Search, which would be the biggest supplier of gas for the pipeline, said earlier this month it and AGL invited other companies to replace the group.
"We've already put in a few calls around the world to some of the major international pipeline players who might like to play a part in realizing this fantastic project," McCormack said in the document. "The response to those calls has been positive."
The Malaysian Petroliam Nasional, known as Petronas, has a stake in Australian Pipeline and was part of the original Papua New Guinea pipeline group with AGL Energy.

Azman Ibrahim, a spokesman for Petronas, which cites its interest in the Papua New Guinea venture on its Web site, could not be reached for comment.
McCormack declined to say whether Enbridge, the second-largest Canadian pipeline operator with whom Australian Pipeline in 2004 bid unsuccessfully for a Western Australian pipeline, was one of the companies Australian Pipeline contacted.
"We have had some dealings with Enbridge in the past and they were good to deal with then," McCormack said in a telephone interview. "It's one of those projects that if we can gauge some interest from parties around the world or even Australia it may be best progressed on a consortium basis."
McCormack said Oil Search wanted to find a replacement pipeline venture before the market opportunity in Australia for Papua New Guinea gas disappears.
"They recognize, as we do, that for these big projects the window stays open for only so long, so time is becoming of the essence," he said.
Ann Diamant, a spokeswoman for Oil Search, could not be reached for comment.
Oil Search and AGL are working on a revised plan for the Australian part of the proposed pipeline, involving building a main link in eastern Australia between Townsville and Gladstone, with a connecting line to Gove in northern Australia. The line would start delivering gas in 2010. A spur line to the Australian town of Mt. Isa would start up in 2012, while gas would be delivered to Moomba in central Australia through an upgrade of an existing line from Mt. Isa to Ballera, Australia, said the Papua New Guinea Chamber of Mines and Petroleum this month.
Exxon Mobil, which is to operate the gas supply portion of the project, said earlier this month that it was examining whether developing Papua New Guinea gas fields for liquefied natural gas exports might be more profitable than piping fuel to Australia.
DirectLink power line sold
Australian Pipeline said Wednesday that it had agreed to buy the DirectLink electricity cable in eastern Australia for 170 million Australian dollars, or $133 million, adding to its power transmission assets.
Australian Pipeline said the cable linking the Australian states of New South Wales and Queensland would be acquired from a venture comprising Country Energy, Hydro Quebec International Group and Fonds de Solidarité FTQ. The price is 1.44 times the value of the asset as estimated for the purpose of price regulation, it said.
The latest acquisition "is consistent with their past practices of paying top dollar for assets," said Nathan Lim, a utilities analyst at Aegis Equities Research in Sydney. Australian Pipeline "has clearly been on the acquisition rampage, using shareholders money for what they deem to be the best outcome for shareholders, which I have difficulty understanding as these acquisitions are mildly accretive, if accretive at all."
The competitive bidding process for the asset, which involved at least two other bidders, necessitated the price paid, Australian Pipeline officials said.
The purchase price is 15.3 times forecast earnings before interest, tax, depreciation and amortization and should add to dividends in the first full year after completion of the transaction, the company said.