PNG LNG Conditioned Gas Cost = 11 Times that of Gulf LNG

[Tree]

I have been incorrectly stating PNG LNG has a $7/Mcf Gas Cost.  That $7/Mcf figure would include CAPEX, taxes and royalty payments and a 12% ROI.

Been working on true CAPEX cost/Mcf comparison of upstream costs and LNG plant costs between Gulf LNG and PNG LNG.  This allows a fair comparison of the projects economics  to gauge how attractive Gulf LNG could be to investors.  Much old cost info based on the EWC/Flex scheme and PNG LNG prior to 4 bn. cost blowout as of last November.   I do think this is accurate.  Pipe in freely if I've made an error.

Costs include required wells, infrastructure, pipelines  (overland and undersea in PNG LNG's case) CSPs and liquefaction plants for the 6.6 Mtpa PNG LNG and and phased 8 Mtpa Gulf LNG.  Included is ~ 10% gas loss from CSP and  liquefaction processes.  Costs are broken into upstream and LNG plant costs.

Conditioned Gas - all costs to deliver conditioned gas to LNG plant, including Gulf LNG sunk cost of $551 million.

LNG plant - cost of liquefaction plant and export facilities.

PNG LNG plant cost is reported as $650/Tonne and Gulf LNG ranges from $450  (EWC)  to $850/Tonne (Stick Built).  $650/Tonne used for this comparison.

OPEX is less than $0.15 for Gulf LNG and PNG LNG should be similar.

PNG LNG and Gulf LNG will sell LNG on F.O.B. basis.  We load and OTker arranges for insurance, shipping and regassification.

PNG LNG - 6.9 Mtpa - $19 bn - 15 yrs. 

     $3.83/Mcf   -  Conditioned Gas Cost

     $0.86/Mcf   -  LNG Plant/Export cost

$4.69/Mcf CAPEX

Gulf LNG - 8 Mtpa - $9.3 bn - 15 yrs.

     $0.34/Mcf  -  Conditioned Gas Cost

     $0.9/Mcf   -  LNG Plant/Export Cost

$1.24/Mcf  CAPEX

PNG LNG's Conditioned Gas Cost delivered to the LNG Plant costs 11 x Gulf LNG Conditioned Gas. 

PNG LNG pays $3.83 for their Conditioned Gas.  They need more.  How much would they pay for feed-stock from Gulf LNG?

The large Aussie projects have $5-$8/Mcf gas costs, prior to liquefaction.  How much would a CVX pay for a Gulf LNG stake to help lower their LNG portfolio pricing?

15 yrs. of 5 Billion annual cash-flow for 8Mtpa plant.  What is a 30% share of that worth?

[Relker]

In the charts they talk about the spotprice for 1 MMBTU. How does 1 MMBTU relate to MCF?

[Putncalls]

In the charts they talk about the spotprice for 1 MMBTU. How does 1 MMBTU relate to MCF?

It's about the same I think  The million BTUa is worth a few % more.

[ArtM72]

1,000 cubic feet of pipeline quality natural gas contains approximately 1 MMBTU at 1,000 BTU/cf.

[ArtM72]

FWIW I calculate an annuity of $16 billion over 20 year at 10% interest is $1.879 billion per year. At 6.8 mtpa (roughly the life of a 6.8 TCF source) and 49,200 cubic feet per ton the capital cost of the facility is $5.61 per mcf (MMBTU). At 5%, $3.83. At 15%, $7.64.