Origin Energy Limited (ASX: ORG) and PNG Energy Developments will undertake an 18-month feasibility study for building an 1800 megawatt power plant on the Purari River in the Papua New Guinea (PNG) highlands.

Queensland Premier Anna Bligh shove off fears of a staggering project cost to be passed on to the public once the hydro-electric project connecting Townsville with PNG is completed. Bligh said, “Like every project of this size, it'll have a lot of hurdles to cross... The project does not [call] on the Queensland Government for any funds. Our role is to facilitate and work with the partners to ensure that the legal requirements of Queensland are met and that we can see a corridor bringing this power into our state.”

The State Government will have to resolve native title and environmental concerns so as to create a pathway for the transmission lines.

Origin managing director Grant King simply placed the expected cost of the project as “many many billions of dollars.” Once completed, the plant would be the first to deliver hydro-electric baseload power to mainland Australia, and provide up to three times more power than a coal-fired plant.

The electricity generated would be transmitted through 600 kilometers of cables under the Torres Strait from the port city of Wabo to the Aboriginal community of Bamaga, on the tip of Cape York in Queensland. From there it would then be transmitted 1000 kilometers to Townsville.

The energy source could supply Townsville city and surrounding areas with renewable energy by 2020.