Papua New Guinea's proposed $3.5 billion gas pipeline to Australia inched closer to reality after the Australian Gas Light Co finalised its purchase of gas and an equity share in the project ahead of schedule.

AGL, whose 10 per cent interest gives it the third-largest stake in the venture, led by ExxonMobil , now expects to complete its $400 million acquisition from Oil Search Ltd in February rather than wait for the final investment decision on the pipeline.
Final approval for the 3,200-km (2,000 mile) pipeline under the Coral Sea is not expected until the second half of 2006 after a number of regulatory approvals have been granted and the Front End Engineering and Design (FEED) phase is complete, but AGL is keen to be fully involved in a critical period for the project.
"The early finalisation of the equity agreement will deliver a number of benefits to AGL and its shareholders," said managing director Greg Martin in a statement.
"AGL believes the other project participants will benefit from our direct input into key project decisions."
Australia's largest energy retailer also became the first customer to convert its A$4.5 billion ($3.4 billion) gas purchase agreement into a binding contract, locking in gas at a lower average price than its current portfolio.
Under the supply deal, AGL will take around 1,500 petajoules (1.4 trillion cubic feet) of gas over 20 years from 2009 to supply its industrial and residential customers in the more heavily populated region of eastern Australia.
About a third of PNG's up to 15 trillion cubic feet of natural gas resources are committed to the pipeline, which will bring to market gas that might otherwise be stranded.