Partner ExxonMobil said the agreement with QAL covers the sale of between 12-30 petajoules of gas per year for a period of 20 years to QAL's refinery at Gladstone. The agreement with CS Energy covers the sale of 10 petajoules of gas per year for a period of 20 years for use in power generation in Brisbane.
The scope of the FEED program includes design of the gas field developments in PNG, gas processing and export compression facilities, and the PNG section of the gas pipeline to the PNG/Australian border.
The FEED contract is expected to take 12 to 18 months and is designed to advance the project to the point where the owners are able to make an investment decision to proceed to construction.
The project owners have also separately signed a binding Letter of Intent with APC (a consortium led by AGL and Petronas) which will see APC undertake a FEED program for the gas pipeline from the PNG border to markets in Australia.
Oil Search also announced it had negotiated an option to buy up to 400 PJ of gas and associated liquids from Esso Highlands Limited, supplied from the Hides gas field in PNG. Oil Search will pay up to US$120 million at project sanction to Esso Highlands for this gas, with the final volume and payment dependent on the volume of gas contracted to the project as at the date of first production.
The Highlands Gas Project participants are ExxonMobil unit Esso Highlands Limited (operator), Oil Search, MRDC (a PNG company representing landowner interests) and Nippon Oil Exploration.