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. Last Updated: 07/27/2016

RusAl Looks to Explore for Gas in Papua New Guinea

RusAl, which produces about 10 percent of the world's aluminum, will explore natural gas resources in Papua New Guinea as a potential source of power for aluminum projects in the region.

RusAl, controlled by billionaire Oleg Deripaska, said Friday that it had signed a memorandum with Papua New Guinea's Ministry of Petroleum and Energy to explore jointly the potential for energy and aluminum developments based on the country's natural gas resources.

The Papua New Guinea projects form part of the Russian company's plans to turn itself into an energy and metals corporation that can expand into other nonferrous metals, such as zinc and copper.

"We'd like to tap into energy resources that would supply us with fuel for a power plant,'' said Vera Kurochkina, spokeswoman for RusAl. "At the same time, the Papua government is keen to establish an aluminum complex in the county."

Papua New Guinea had 15.1 trillion cubic feet of gas reserves as of the end of 2005, according BP data.

RusAl is also considering operations in Australia. The company formed a working group with officials from the northeastern state of Queensland last June to "develop electricity projects," the company said on its web site.

"We're looking at the two neighboring sites simultaneously and will make our decision on the next step when both studies are completed," Kurochkina said.

RusAl plans to create the world's largest aluminum producer by merging with smaller domestic rival SUAL and assets belonging to Swiss trader Glencore. The merged company will list on the London Stock Exchange within 18 months, RusAl has said.

(Bloomberg, Reuters)