Fed: PM to try to enable Timor pipeline to go ahead = 2

AAP General News (Australia)
08-01-2001
Fed: PM to try to enable Timor pipeline to go ahead = 2

Australian Petroleum Production and Exploration Association (APPEA) executive director
Barry Jones said the decision by the US energy giant left the country's south east with
medium-term gas supply issues.

The pipeline had underpinned $13 billion in on-shore gas projects in Australia and
its indefinite deferment put as many as 3,000 jobs at risk.

Phillips cited unresolved legal, fiscal and tax issues from the new Timor Gap agreement
signed with fanfare last month between Australia, the United Nations and East Timor's
interim leaders.

Mr Howard said Australia understood East Timor's need for revenue, which is why Australia
was so generous in the negotiations over the Timor Gap treaty.

But East Timor must understand the implications of ad hoc changes in attitude on revenue
would terrify any investor, he said.

Mr Howard also said he was prepared to look at concerns expressed by negotiators about
the Australian tax system.

The UN's chief negotiator has said Phillips Petroleum also had problems with the fact
the Australian Taxation Office changed the depreciation schedule on the pipeline in ways
which made it less profitable.

"Obviously if anybody's got something to put to us on that, we're prepared to take
it up," Mr Howard said.

"It's a very important proposal and we'd like to see it go ahead."

AAP lm/cjh/br

KEYWORD: TIMOR GAP HOWARD 2 CANBERRA

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