ShareholdersUnite Forums
Shell tipped to take stake in InterOil’s Papua New Guinea LNG project - Printable Version

+- ShareholdersUnite Forums (http://shareholdersunite.com/mybb)
+-- Forum: Companies (http://shareholdersunite.com/mybb/forumdisplay.php?fid=1)
+--- Forum: InterOil Forum (http://shareholdersunite.com/mybb/forumdisplay.php?fid=4)
+--- Thread: Shell tipped to take stake in InterOil’s Papua New Guinea LNG project (/showthread.php?tid=3543)

Shell tipped to take stake in InterOil’s Papua New Guinea LNG project - Rob Cos - 05-03-2013

(Well Petromin is being disbanded and replaced but FYI)


http://blogs.platts.com/2013/05/02/shell-lng/



Shell tipped to take stake in InterOil’s Papua New Guinea LNG project


By Christine Forster | May 2, 2013 06:16 AM COMMENTS (0)

Of the three oil and gas majors understood to be vying for a share of US-listed junior InterOil’s Gulf LNG project in Papua New Guinea, Shell is being tipped by some industry insiders as the bidder most likely to succeed.

The PNG government approved InterOil’s plans to develop the 3.8 million mt/year Gulf LNG project in November last year but has required that the company bring in a partner with a track record operating similar projects. At the same time the government said state-owned resources company Petromin would take a 50% stake in the onshore Elk and Antelope gas fields that will feed the LNG project.

Shell’s perceived advantage over rivals ExxonMobil and Total centres on its existing relationship with the PNG government and the strategic alliance it signed with Petromin in August 2011. Since then, PNG Minister for Petroleum and Energy William Duma has repeatedly pointed to Shell as a potential stakeholder in the InterOil project.

The Shell-Petromin deal included a joint technical study of PNG’s major hydrocarbon basins to evaluate exploration opportunities that the two companies could pursue together.

Shell’s overall appeal as a partner for the PNG government may also be strengthened by its ownership of emerging floating LNG technology. In addition to stranded offshore resources, Petromin has in the past eyed the option of using an FLNG facility as an alternative to onshore liquefaction to monetize small-scale gas discoveries in PNG’s Foreland Basin, host to the Elk and Antelope fields.

Shell is the operator of Prelude, which became the world’s first FLNG project to reach a final investment decision when it was approved by the company in May 2011. The massive Prelude FLNG facility is currently being built in South Korea and is expected to be deployed to its position off Western Australia and start operations around 2017.

ExxonMobil, on the face of it, also has a strong hand to play in PNG and has already ploughed massive investment into the country. The US major is the operator of the $19 billion PNG LNG project, currently under construction at a site near the capital Port Moresby.

There are obvious synergies for ExxonMobil in securing a stake in InterOil’s gas resources as the company is currently looking for additional gas to feed third and fourth production trains at PNG LNG. The foundation project being built comprises two trains with capacity to produce 6.9 million mt/year.

On the other hand, ExxonMobil could be hampered by the PNG government’s desire to have more than one major international operator in its emerging LNG sector, according to local observers.

Those same observers attribute Total’s underdog status to its lack of operating experience, despite the fact the French company has a broad international LNG portfolio, including stakes in Australia’s Ichthys and Gladstone projects.

InterOil has been negotiating with “at least two major oil companies” over participation in Gulf LNG, and the PNG government is involved in those talks, InterOil Vice President Capital Markets Wayne Andrews told a briefing last month.

The unexpected retirement, announced April 24, of InterOil’s founding CEO Phil Mulacek is meanwhile expected to speed the process toward a deal. Mulacek, who ended in his role on April 30, was said to have been unwilling to hand over the reins to one of the big oil and gas companies.



RE: Shell tipped to take stake in InterOil’s Papua New Guinea LNG project - Palm - 05-03-2013

Interesting all of the faces being painted on this process. This almost sounds like a pump-piece initiated by Shell. They make it sound like Shell has done all of these wonderful things for the PNG government. JAPEX has done far more in regard to offering to provide financing and already training a good number of Petromin personnel in upstream operations. And I think the Japanese government has done just a little more than Shell in the way of providing funding for various projects. Seems JKM has been pushed aside by the press recently.

The explanation for me that makes the most sense in this has to do with China. We've mentioned before that Shell is China's major of choice and they have stepped up the game in funding for PNG. Early this year O'Neill was in China when he issued his statement that Japan was being unreasonable in its stance on the feud with China over the islands they are barbing over. Shell has no real reason to be in favor with PNG outside of China's influence. Shell abandoned PNG years ago and IOC bought its downstream business.

This whole thing may well be a tug of war among nations more than companies. And as we've said, Phil would not be able to stomach a Shell partnership.