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+--- Thread: IOC interest in TOT LNG plant, price for what? (/showthread.php?tid=5522)
IOC interest in TOT LNG plant, price for what? - strategyguy536 - 12-11-2013
I have three questions on our deal. I think the optimum answers would make all the difference in the world on the valuation of IOC's business case. If the answers are already obvious, please excuse my ignorance.
1. The LNG plant. Up to now I have not figured out the status of Total's future LNG plant relative to IOC. Some have claimed that IOC will get OE in the plant and some that IOC must buy into the plant., or must buy in if it elects to own a portion.
What is the story:
a. Will IOC own 30% of the LNG plant without capital contribution, as some carried interest, based on all the possible positives of a successful FID?
b. Alternatively, will IOC have to pay up for an ownership stake in the LNG plant, and if so, wtih what price and terms?
c. Is there something in between?
2. Price paid for IOC's NG. Whether or not IOC owns some of the LNG plant, what price will IOC be paid for its own produced gas as it enters and/or as it leaves the LNG plant? In other words will IOC gain from:
a) some real or ersatz retail price for gas delivered to the plant (much like a "Henry Hub" or "Houston area" price in the USA)?
b) some retail spot price for delivered LNG in Asia (less some processing and trnsport charges)?
c) or alternatively at some lower price reflecting that TOT might have produced the gas on its own dime?
3. What about the IOC refinery and the liquids? Most if not all the discussion has been on the NG. Who gets the liquids and at what price? Is there separate pricing or ownership for the liquids? Does IOC and its refinery have a role to play here, and if so, what and how?
RE: IOC interest in TOT LNG plant, price for what? - jft310 - 12-11-2013
Per the press release and CC IOC will own 30 percent of the LNG plant
They will buy into the plant with cash and financing . Been posted they will put $1 billion down and finance the balance . Assume an 18 billion cost to build
ioc is selling the liquids also in the deal. They still own 30 percent of all the NG and 30 percent of all the liquids .
RE: IOC interest in TOT LNG plant, price for what? - strategyguy536 - 12-11-2013
'jft310' pid='33891' datel Wrote:Per the press release and CC IOC will own 30 percent of the LNG plant
They will buy into the plant with cash and financing . Been posted they will put $1 billion down and finance the balance . Assume an 18 billion cost to build
ioc is selling the liquids also in the deal. They still own 30 percent of all the NG and 30 percent of all the liquids .
Thanks. That fills in most of my blanks.
RE: IOC interest in TOT LNG plant, price for what? - Stavros - 12-11-2013
I believe the total project cost will be something like $10-12 billion including production wells, CSP, pipelines, jetty, storage and LNG plant.
RE: IOC interest in TOT LNG plant, price for what? - jft310 - 12-11-2013
'Stavros' pid='33931' dateline='<a href="tel:1386738 Wrote:I believe the total project cost will be something like $10-12 billion including production wells, CSP, pipelines, jetty, storage and LNG plant.
stavros -makes sense the IOC costs would be lower , no under seas pipeline and no mountain ranges to cross. Dr Mike on the call stated model the PNGLNH costs and that's where I got $18 Billion I subtracted the under seas pipe to get $18 Billion
RE: IOC interest in TOT LNG plant, price for what? - cybersssss - 12-11-2013
Either way you look at it, the cash flows are huge and will amount to a major dividend. At this point we need to wait to see drilling results.
RE: IOC interest in TOT LNG plant, price for what? - Palm - 12-11-2013
Great info. Another likely savings will be in the drilling. With EA being a continuous structure and possibly even bigger yet based on management thoughts, they will have a huge savings here. Plus all of the work IOC has done over the years building roads, base camps, staging areas, etc they can move pretty quickly. Was interesting to see all of the roads in place in EA per the SEC filing of the SPA. Pretty extensive. And at Napa Napa the lay down area is pretty well done.
Then we look at the work already done in site selection, pipeline routing, CSP design and location.
A lot already in place.
RE: IOC interest in TOT LNG plant, price for what? - ArtM72 - 12-11-2013
The longer we wait to see it the more important the jvoa seems to become. Does IOC get credit for sunk costs to date? Is the carry on the next four wells that credit? Is the farm-in consideration contained in the jvoa or elsewhere ?
To be honest, I look at the deal and see a mop.
RE: IOC interest in TOT LNG plant, price for what? - Stavros - 12-11-2013
On the surface this seems to be the worst stinker of a deal I could ever conjure up in my wildest nightmares.
I truly hope that Dr Hession has, for reasons totally opaque to shareholders, withheld information that will make the deal, and IOC's near-term plans, look more reasonable/ palatable to us all.
If this is the case then the PPS has hit bottom.
If nothing is forthcoming then long shareholders are in very deep Elk/ Antelope doo doo for an extended period of time.
I'd like to believe it's the former.
RE: IOC interest in TOT LNG plant, price for what? - jft310 - 12-11-2013