The Final Parabolic Chapter

[Bobby]

great thread.  appreciate these posts with special kudos to resource.  will any of you gentlemen be joining us Sunday evening in the woodlands?

[sydbod]

It is critical to recognize that while IOC's impending deal with XOM is a best case scenario for IOC shareholders, it is a worst case scenario for OSH (in spite of what its ignorant cheerleader analysts convey).  Until now, OSH effectively retained a free option on the upstream underpinning PNG LNG's expansion.  OSH's future growth and premium to NAV is now predicated on its speculative Gulf drilling program, as there will be no interest in developing P'nyang for PNG LNG.  TOT believes that it has received O'Neill's blessing to become a big player in PNG, the company has much bigger aspirations than its farm in agreement with OSH.  Neither company has given up on IOC, and they know they must act quickly.

Can you expand on this as it goes against all that I believe ????

My understanding is that OSH,Santos and XOM each are approximately 1/3 partners in the exploration and the PNG LNG plant

OSH is charged with the management of the exploration part of the partnership.

XOM is charged with the management of the building and running of the LNG plant part of the partnership.

Santos is just a silent partner.

There are no decisions that a minority partner like XOM can take to disadvantage OSH @ Santos combined within the PNG LNG project.

I believe one has to take at face value that XOM is purchasing gas for the PNG LNG project and that XOM is just the face of  the 3 major partners in the PNG LNG project.

If one looks at a picture of the PNG LNG project one will see that train 1 and 2 are bundled together within the site and an empty single area is set asside for train 3 and 4.

I suspect that there is some sort of economig advantage to be gained by adding trains in pairs.

I read it that P'nyang fields with additions from other gas will be one of the trains in 3 @ 4 while the gas purchased by XOM for the PNG LNG project will be used for the second of the 2 new trains.

[Palm]

Hey ResArb,

Importantly, Gaylen Byker informed PNG Industry News that “The Gaffney, Cline and Associates estimates are sufficient to underpin two LNG trains”, insinuating that the GCA certified resource could be in excess of 9Tcf (4.6 Tcf of which will be used for train 3 of PNG LNG).

Partly true and the' two-train' is not a revealation by Byker.  Phil clarified this point in last Nov. CC.  The two trains he referred to in Nov. were Gulf LNG trains.

GC #s of 6.6T would produce 138 Mt LNG.

That volume could supply two 4.6 Mtpa trains for 15 yrs.  More gas needed for 20-30 yr. PNG LNG trains and will be located with further drilling in PRL15.

Tree, my understanding is that the year-end 2012 GCA resource estimate was significantly increased subsequent to Antelope 3.  Byker's recent comments contemplated 4.6 Tcf being devoted to train 1 of PNG LNG, leaving at least 3-4 Tcf for a second train.

tResArb, The leaked part of the GC resource estimate was 6.6T's in E/A and yes, that is prior to Ant-3.  Apparently the un-leaked parts of that report state that with further drilling 8+ Ts were expected.  That was in line with GLJ of the same time period.  I haven't seen/heard of a new GC # and likely the 6.6T still stands as a conservative #.  It makes sense too, 4.6 T to XOM, 1.2T to PetChem plant and .8T to PNG power with EWI.  Those are first fruits and IOC's Gulf LNG aspirations and/or additional PNG LNG trains will need to be resultant of further delineation of E/A.

Seems like a safe bet that further drilling will yield those 15-16 Ts that Phil stated in CC.

I don't think there will be an additional .8Ts needed for a power plant.  Mitsubishi's methane to DME petro plant will use the 1.2Ts O'Neill mentioned and the DME produced will likely be used to substitute for diesel being used now.  DME is seen a one of the nest clean fuels in poser production because when burned it gives off no particulates (soot).  Mitsubishi is building a smiliar plant in Tobago.  Question is whether EWC's gas-fired power plants burn DME or not.

And if this 1.2Ts has been "mandated" by O'Neill it sure looks like that additional pipeline will be needed, and as long as you are building it, build it big.  Then the possibilities are quite large.

 Importantly, Gaylen Byker informed PNG Industry News that “The Gaffney, Cline and Associates estimates are sufficient to underpin two LNG trains”, insinuating that the GCA certified resource could be in excess of 9Tcf (4.6 Tcf of which will be used for train 3 of PNG LNG).

[ArtM72]

[/quote]

I don't think there will be an additional .8Ts needed for a power plant.  Mitsubishi's methane to DME petro plant will use the 1.2Ts O'Neill mentioned and the DME produced will likely be used to substitute for diesel being used now.  DME is seen a one of the nest clean fuels in poser production because when burned it gives off no particulates (soot).  Mitsubishi is building a smiliar plant in Tobago.  Question is whether EWC's gas-fired power plants burn DME or not.

[/quote]

Palm - I have to think so long as you have natural gas you burn it in highly efficient combined cycle turbines, throwing out the old, inefficient, high maintenance diesels.  Doesn't make a lot of sense to convert ng to DME just to burn it on site.  Other than DME being a clean burning fuel, it has a boiling point of -11 deg F at atmospheric pressure.  That means DME is a whole lot less expensive to transport and store as a liquid than LNG which is stored at somewhere around -260 deg F.