Dr. Fesharaki Global LNG expert; IOC must be next

[Palm]

Dr. Fereidun Fesharaki a Global LNG expert was just recently interviewed on EMTV. This guy has been involved in watching png develop for 3 decades. He KNOWS the industry and what it takes to get a project done. For the "2nd LNG project in PNG" he says:

1. It MUST include the EA resource because of its size

2. Only the biggest of players are known to be involved; Exxon, Total, Shell and possibly Chevron. These guys know how to get it done an get it financed.

3. Expects Exxon might be involved in some way. They need a successful 3rd and hopefully 4th train to really drive economics due to costs. They are having challenges finding enough gas and what they hav to date could support a 3rd train, but not for a long period of time.

4. The IOC project will likely have at least 2 trains the same size as PNG LNG; possibly a little smaller but not much.

5. Cash flows from the 2nd project will be at least equal to PNG LNG.

6. The LNG from the 2nd project will be very easily sold in the market basically guaranteeing financing and success.

He is the first speaker on this interview and the whole 20 minutes is more than worth listening to. Probably best net review to dat on what all is going on in PNG with LNG

http://www.emtv.com.pg/component/zoo/ite...episode-70

[admin]

Dr. Fereidun Fesharaki a Global LNG expert was just recently interviewed on EMTV. This guy has been involved in watching png develop for 3 decades. He KNOWS the industry and what it takes to get a project done. For the "2nd LNG project in PNG" he says:

1. It MUST include the EA resource because of its size

2. Only the biggest of players are known to be involved; Exxon, Total, Shell and possibly Chevron. These guys know how to get it done an get it financed.

3. Expects Exxon might be involved in some way. They need a successful 3rd and hopefully 4th train to really drive economics due to costs. They are having challenges finding enough gas and what they hav to date could support a 3rd train, but not for a long period of time.

4. The IOC project will likely have at least 2 trains the same size as PNG LNG; possibly a little smaller but not much.

5. Cash flows from the 2nd project will be at least equal to PNG LNG.

6. The LNG from the 2nd project will be very easily sold in the market basically guaranteeing financing and success.

He is the first speaker on this interview and the whole 20 minutes is more than worth listening to. Probably best net review to dat on what all is going on in PNG with LNG

http://www.emtv.com.pg/component/zoo/ite...episode-70

Yes, I have to say I agree. Thanks for this find. Very interesting.

[Tree]

Nice one Palm.  His opinions are crushing to short thesis.

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[petrengr1]

Nice one Palm.  His opinions are crushing to short thesis.

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Thanks Palm for this link. This is an excellent interview and I highly recommend it for everyone.

[Palm]

Thanks Pet; one of the many comments he makes in this that is great is that IOC's project is only for the "Big Boys" and then he names off Exxon, Total, Shell and possibly Chevron. Says the government is wise taking their time and getting it right with the right partner for IOC. "These Big Boys know how to do a project like this, get it financed and have the gas sold right away".

So majors=supermajors=Big Boys

[petrengr1]

Thanks Pet; one of the many comments he makes in this that is great is that IOC's project is only for the "Big Boys" and then he names off Exxon, Total, Shell and possibly Chevron. Says the government is wise taking their time and getting it right with the right partner for IOC. "These Big Boys know how to do a project like this, get it financed and have the gas sold right away". So majors=supermajors=Big Boys

Yes, he says the Major Operator will have the gas sold before construction begins. That is how they can get the financing approved by the banks. Assurance of gas sales and financing is the key to getting these projects built.

[Spartina]

Great find Palm, thanks.

[Palm]

And the fact that this guy is by nature a bit conservative, but yet from what he has seen and heard just what he knows about EA today says they have a 2 train project from the start is very bullish. Also his statements that PNG LNG being 80% complete (shows how recent this interview was) puts PNG on the map as being a viable producer of LNG, and that the "cost blowout" that the project has seen is very modest compared to those in Australia AND the majority of that blowout is due to the movement of the Kina currency says a lot to any banks; PNG is a good place to be and with some proper management the currency risk can be minimized. So the old saying can't be more relevant; "Come to Papua".

There is little doubt in my mind at this point that a deal announcement is not far away. Byker made it crystal clear that the BOD can and likely will approve a deal regardless of the CEO situation. That's their job anyways. There is huge risk in being short right now. In fact they may be backing off a little. I saw yesterday where Schwab has dropped their interest rate on borrowed shares to 4% from 7%. Are shorts sending a signal?

[Palm]

On Petromin the good Dr also addressed the decision to break up Petromin. He stated that it was absolutely the correct thing to do for the LT ownership and management of the mining and petroleum interests. He stated that without this change there would continue to be poor decisions made and poor management of the State's interests. He compared the proposed setup with things he has seen elsewhere and likes what he sees.

[admin]

["There is huge risk in being short right now. In fact they may be backing off a little."]

They're finding that out as we speak. Almost all shorts must be under water at these levels, and listening to Dr. Fesharaki can't be terribly reassuring..