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PORT MORESBY, Papua New Guinea (PNG Post-Courier) - Using Papua New Guinea’s gas reserves to open up new mining investments is being advocated in a joint consultation between the ministries of Mining and Petroleum and Energy.

Acting Prime Minister and Minister for Petroleum and Energy Sir Moi Avei said that two of PNG’s key economic ministries were working closely to look at options to use gas to "kick-start" industrialization in the country.

Sir Moi said he held a series of discussions with his counterpart, Minister for Mining Sam Akoitai, to seeks ways to leverage PNG’s liquefied gas resources as a way to open up new mining investments like the Frieda copper/gold project and to go further by building a copper smelter in the country.

"We have also looked at options to use gas to extend the lives of our existing mines or to open up new mines. Currently there is a proposal that Santos, a sustainable development company is looking at a possibility of utilizing gas at Elevala for Ok Tedi," Sir Moi said.

"Our vision is to use our gas to kick-start industrialization to down stream processing."

He said the Government’s options on commercialization of gas were still open and they "did not want to put all their eggs in one basket".

Sir Moi said with the PNG to Australia gas pipeline project being its main option, but the Government, over the past three years, had considered other options including the export of compressed natural gas to New Zealand, which Oil Search announced recently.

He said the Highlands Gas Project (gas to Australia) would change the economic landscape of PNG as that was the only guarantee that could equally improve the economic conditions of the country.

Sir Moi said he would be making an announcement soon that another gas customer — Queensland Alumina Limited — would sign for the Highlands Gas Project moving the project closer to the front-end design and engineering stages. The minister could not outline further details of the proposed agreement between QAL and the owners or the Highlands Gas Project.

August 10, 2004

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