Canada's Alcan Says Too Early To Talk About New PNG Pipe

MELBOURNE--Aluminum giant Alcan Inc.has signed an agreement to look at using Papua New Guinean gas to power its Gove alumina refinery, but says it is too early to start talking about piping gas to Australia.

Alcan has agreed to work with London-based Rift Oil PLC to see if the Douglas gas discovery in western PNG could supply Gove in Australia's northern Territory with the 40 billion cubic feet of gas it needs each year.

Douglas would need to hold about a trillion cubic feet of gas for it to be worth Alcan getting further involved, and transport of the gas to Australia would most likely be via a pipeline.

Talk of piping gas to Australia rings alarm bells for those who followed the sorry saga of a similar ExxoMobil Corp. and Oil Search Ltd. pipeline proposal, abandoned last month, and Alcan is talking down the prospect.

"At this point (a pipeline) is not at all on the table - we aren't even looking at how we will get it across if they find enough gas there," an Alcan spokesman said.

"At that point, if we think it is valid, we will go forward with something more concrete."

Alcan had signed up for gas from the Exxon pipeline but, with that project's demise, is now looking for alternative long term options to supply energy hungry Gove.

The Canadian aluminum giant last year entered into an agreement with Queensland coal seam gas producer Arrow Energy Ltd. on a possible gas-to liquids project to supply Gove.