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XOM CC Transcript - TxPm - 08-02-2013
Pg 3 is where they discuss PNG (E/A Specifically) in the prepared remarks & then they discuss it again on page 6 in the Q&A Session
RE: XOM CC Transcript - petrengr1 - 08-02-2013
From Seeking Alpha:
The PNG LNG project construction is currently 88% complete and is achieving project milestones towards a 2014 startup.
Commissioning activities for the first train at the LNG plant are ongoing while construction activities for the second train continue. Progress also continues at the Hides gas conditioning plant for equipment including gas turbine generators and utility systems that’s being received and installed. We are also advancing expansion opportunities, including negotiations with NOL Corporation and Pacific LNG on the future development of the Elk, Antelope resource. Major terms have already been agreed and should negotiations successfully conclude Exxon Mobil is proposing that 4.6 TCF of the gas resource from the Elk Antelope field be used to underpin the construction of an additional train at the PNG LNG project site, subject to partner and government agreement.
Evan Cleo - Morgan Stanley- My first question on P&G. I mean it’s clearly a differentiated position for Exxon I know you discussed your negotiations required additional supply and you picked up some exploration acreage in the quarter. But could you discuss how additional expansion trend compared within your portfolio versus other projects that I know you overviewed globally. And additionally with one and two were I think in their five years from FID to expected first gas I would presume expansion trains could be much faster than that. And then based upon the availability of gas the Exxon vision replicating style development here of per type of a concept. I have a follow up.
David Rosenthal
Yeah, let me kind of start at the back of your question first. Clearly as we’d be true of your project once you’ve got all the facilities in play the pipelines the capacity the trends the utilities all the common facilities any addition is typically going to be quicker and have quite attractive incremental economics. So I wouldn’t want give a specific time frame on an additional trend beginning other than they say we have plenty of land space there, we have plenty of infrastructure. So we certainly have the ability to as rapidly as possible expand that facility over the course of the next few years and we do have a number of opportunities we mentioned the – oil discussions are going on we have had some success in exploration recently and – south and we have got some other exploration opportunities in the area. So we are optimistic on that.
In terms of relative economics of Papua New Guinea versus other project I wouldn’t to give any specific comparisons or numbers other than to say we do view that project quite attractive for us and we certainly look forward to bringing forward some expansion opportunities and continuing to improve further on those economics.
And we’ve got to Pablo with Raymond James.
Unidentified Analyst
Thanks for taking my question. First just a quick one on P&G, LNG any sense of when you’re looking to make a decision price extension on trend free?
David Rosenthal
No, I really don’t have an outlook on that. We’re still in the commercial discussion on the potential for extension. So until those concluded it would be difficult to give any forward guidance on timing after that. Other than we’re working on it if those negotiations are successfully concluded we’ll be in the better position to talk about the going forward timeframe.
RE: XOM CC Transcript - davidhmtk - 08-02-2013
'TxPm' pid='26516' datel Wrote:
Pg 3 is where they discuss PNG (E/A Specifically) in the prepared remarks & then they discuss it again on page 6 in the Q&A Session
Terrible transcription skills, presume it is a computer. First, that three letter company, that along with Pacific LNG is negotiating to sell gas for XOM expansion is, as we all know, IOC and it was said right, just transcribed terribly. Also Evan Calio's name is butchered (and they refer to Morgan Stanley as an "unidentified company", There is another PNG question from Raymond James. Overall, negotiations are ongoing, key terms have been agreed to (leaving ????). We knew that, but it is nice to hear it featured by XOM. My overall take - they need low production costs and more gas. PNG is the top story on their LNG production slide, mentioning negotiations for expansion gas.
RE: XOM CC Transcript - admin - 08-02-2013
["key terms have been agreed to (leaving ????)"]
Lawyers..
RE: XOM CC Transcript - davidhmtk - 08-02-2013
'admin' pid='26519' datel Wrote:["key terms have been agreed to (leaving ????)"] Lawyers..
No
RE: XOM CC Transcript - davidhmtk - 08-02-2013
'davidhmtk' pid='26520' datel Wrote:
'admin' pid='26519' datel Wrote:["key terms have been agreed to (leaving ????)"] Lawyers..No
I have been part of seven-sided 30 lawyer negotiations, (6 feet of bound deal documents). It takes a couple weeks to identify the issues, then negotiations, then a week of redrafting, then renegotiations, then another week of red-lining & redrafting. Maybe 30 days of drafting, the rest is negotiating. Some detail or several is in dispute (or more hopefully, has been in dispute and is resolved and the deal is ready).
RE: XOM CC Transcript - Movieguy - 08-02-2013
I have been part of seven-sided 30 lawyer negotiations, (6 feet of bound deal documents). It takes a couple weeks to identify the issues, then negotiations, then a week of redrafting, then renegotiations, then another week of red-lining & redrafting. Maybe 30 days of drafting, the rest is negotiating. Some detail or several is in dispute (or more hopefully, has been in dispute and is resolved and the deal is ready).
[/quote]
That is how I see it as well.
RE: XOM CC Transcript - jft310 - 08-02-2013
Deal is under final review with the lawyers
RE: XOM CC Transcript - Movieguy - 08-02-2013
'jft310' pid='26525' datel Wrote:Deal is under final review with the lawyers
Are you posting this as something new, or is this the same review we have been hearing about for weeks? Just would appreciate clarification. Thanks.
RE: XOM CC Transcript - Getitrt2 - 08-02-2013
Thanks for posting those excerpts, petrengr1. Here is my effort at a corrected version:
"The PNG LNG project construction is currently 88% complete and is achieving project milestones towards a 2014 startup.
Commissioning activities for the first train at the LNG plant are ongoing while construction activities for the second train continue. Progress also continues at the Hides gas conditioning plant for equipment including gas turbine generators and utility systems that’s being received and installed. We are also advancing expansion opportunities, including negotiations with InterOil Corporation and Pacific LNG on the future development of the Elk/ Antelope resource. Major terms have already been agreed, and should negotiations successfully conclude, Exxon Mobil is proposing that 4.6 TCF of the gas resource from the Elk/Antelope field be used to underpin the construction of an additional train at the PNG LNG project site, subject to partner and government agreement.
Evan Calio - Morgan Stanley.
My first question is on PNG. I mean it’s clearly a differentiated position for Exxon. I know you discussed your negotiations required for additional supply and you picked up some exploration acreage in the quarter, but could you discuss how additional expansion trains compare within your portfolio versus other projects that I know you have reviewed globally. And additionally with trains one and two I think there were five years from FID to expected first gas. I would presume expansion trains could be much faster than that. And then based upon the availability of gas, does Exxon envision replicating a (inaudible) style development here of a train per type of a concept. I have a follow up.
David Rosenthal
Yeah, let me kind of start at the back of your question first. Clearly as would be true of our project, once you’ve got all the facilities in play, the pipelines, the capacity, the trains, the utilities, all the common facilities, any addition is typically going to be quicker and have quite attractive incremental economics. So I wouldn’t want to give a specific time frame on an additional train at Papua New Guineau beginning, other than to say we have plenty of land space there, we have plenty of infrastructure. So we certainly have the ability to as rapidly as possible expand that facility over the course of the next few years, and we do have a number of opportunities for gas. We mentioned the InterOil discussions are going on, we have had some success in exploration recently in P’nyang South, and we have got some other exploration opportunities in the area. So we are optimistic on that.
In terms of relative economics of Papua New Guinea versus other projects, I wouldn’t want to give any specific comparisons or numbers other than to say we do view that project as quite attractive for us; and we certainly look forward to bringing forward some expansion opportunities and continuing to improve further on those economics.
And we go to Pavel Molchanov with Raymond James.
Thanks for taking my question. First just a quick one on PNG LNG. Any sense of when you’re looking to make a decision on project expansion on (inaudible - train three?)?
David Rosenthal
No, I really don’t have an outlook on that. We’re still in the commercial discussion on the potential for expansion. So until those are concluded it would be difficult to give any forward guidance on timing after that, other than we’re working on it, and if those negotiations are successfully concluded, we’ll be in a better position to talk about the going forward time frame."
NOTE: Further revised after reviewing Seeking Alpha version.