Epic’s statement suggests it is confident that Phillips’ deferral of stage 2 is only temporary.
Phillips’ deferred the project due to uncertainty on various legal, fiscal and taxation issues surrounding the Timor Sea Arrangement entered into by the Australian and East Timor governments on July 5.
Philips said stage 1 of Bayu-Undan, a liquids-stripping and natural gas recycle project now under development, will still go ahead and will begin full commercial production in 2004.
“Agreement by East Timor to fiscal and taxation arrangements reflecting their earlier commitments would allow further investment to proceed, providing significant economic benefits to the Bayu-Undan co-venturers and the new nation of East Timor,” said Stephen Brand, president of Phillips’ Australasia division.
Epic was planning to pump gas south to a central Australian gas transmission hub at Moomba from the Darwin landfall of the Bayu-Undan stage 2 undersea pipeline coming in from fields in the Timor Sea.
Sue Ortenstone, chief executive of Epic Energy, said the company remains “on track” with the Darwin-to-Moomba pipeline project.
“We support the stance taken by Phillips,” she said in a statement. “Epic Energy continues its commitment to deliver Timor Sea gas to South Australia and New South Wales by the middle of this decade.”
“Epic Energy’s core objective is to be in a position to transport domestic gas to the south and east of Australia when the gas lands ashore in Darwin, and at this point in time, Epic Energy’s overall development schedule remains unchanged,” she said.
In 1999, Epic Energy entered an alliance with Phillips to jointly pursue development plans to bring gas from the Timor Sea to markets in Australia’s southeast.
The project was granted major project facilitation status by the government on Nov. 8, 2000.
Epic Energy is 33% owned by El Paso Energy Corp. (EPG) and 33% by Dominion Resources Inc. (DNIR), both U.S.-based concerns, while three other companies hold equal 11% shares, namely AMP Asset Management Australia Ltd., Deutsche Asset Management Australia Ltd. and Hastings Funds Management Ltd.
-By Ray Brindal, Dow Jones Newswires; 612-6208-0902; firstname.lastname@example.org
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