And The Dream Comes True

[jft310]

Admin-This is part of this 60 day Exxon window. Who owns what.???
Without IOC's NG there is no expansion. Should the owner of the NG participate in the LNG?? Most would have to say yes,
Oil Search and Santos own part of the infrastructure true but only on 2 trains. How will this be resolved??
Most timely. very relevant.
The LNG participation rate helps determine the amount of booked reserves from FID.
The news services are talking about 60 day FID time tables.
Maybe you missed the FID comments?
Or this is well more than an offtake deal to Exxon.
IOC will own most of the new pipe
IOC will own the CSP
IOC will own their infrastructure to use as they see fit
IOC owns the NG has some rights to LNG participation.
Its complex and will require the analyst to explain.
Discussion with the understanding these are per our understanding is spot on.

[Palm]

A lot of speculation which is based on what various parties are saying. One thing is clear; as operator Exxon wears the big boy underwear in PNG LNG and they will with PRL 15. As operator they are responsible to direct, make decisions and make sure that others perform. We don't know at this point what the Exxon/OSH relationship is. OSH was charged with finding enough gas for the original 2 trains totaling 6.9 mtpas and likely for any expansion. They are having trouble doing the expansion piece, and as operator Exxon likely has said that something has to change. I don't think they have thrown OSH aside because that isn't necessary yet, and OSH is still saying that the gas they have Total partnering on COULD feed the existing PNG LNG project and/or it could result in a new project. So things have obviously changed in Exxon's mind because they are forced to make things happen as operator.

PNG as the legal owner of resources wants the resources developed commercially. They will likely bless different possible scenarios as long as the development happens according to their rules. Exxon will call some tough shots if need be and the likes of Santos and OSH will have to live with it, or they have the option of pulling out at some point. In the end it's very big business and PNG is telling Japan, S Korea, China, India and others that they will provide them LNG. If the development doesn't work to their advantage (securing the LNG they want and need), PNG loses, Exxon loses and all partners lose. These people understand that and have too much to lose by not playing along and maybe even partnering with someone who they never thought they might.

So we play with scenarios like we always have because there are several scenarios that make sense for this all to happen. Exxon and PNG will make sure it happens.

Anyone familiar with the show Shark Tank understands the term, "I'm out". We have seen in Australia partners say "I'm in" one day and "I'm out" the next. Exxon may have to ask some of the PNG LNG round 1 partners if they are in or out.
http://www.youtube.com/watch?v=nZMaBQDXOkk

[admin]

A lot of speculation which is based on what various parties are saying. One thing is clear; as operator Exxon wears the big boy underwear in PNG LNG and they will with PRL 15. As operator they are responsible to direct, make decisions and make sure that others perform. We don't know at this point what the Exxon/OSH relationship is. OSH was charged with finding enough gas for the original 2 trains totaling 6.9 mtpas and likely for any expansion. They are having trouble doing the expansion piece, and as operator Exxon likely has said that something has to change. I don't think they have thrown OSH aside because that isn't necessary yet, and OSH is still saying that the gas they have Total partnering on COULD feed the existing PNG LNG project and/or it could result in a new project. So things have obviously changed in Exxon's mind because they are forced to make things happen as operator. PNG as the legal owner of resources wants the resources developed commercially. They will likely bless different possible scenarios as long as the development happens according to their rules. Exxon will call some tough shots if need be and the likes of Santos and OSH will have to live with it, or they have the option of pulling out at some point. In the end it's very big business and PNG is telling Japan, S Korea, China, India and others that they will provide them LNG. If the development doesn't work to their advantage (securing the LNG they want and need), PNG loses, Exxon loses and all partners lose. These peopel understand that and have too much to lose by not playing along and maybe even partnering with someone who they never though they might. So we play with scenarios like we always have because there are several scenariosn that make sense for this all to happen. Exxon and PNG will make sure it happens. Anyone familiar with the show Shark Tank understands the term, "I'm out". We have seen in Australia partners say "I'm in" one day and "I'm out" the next. Exxon may have to ask some of the PNG LNG round 1 partners if they are in or out. http://www.youtube.com/watch?v=nZMaBQDXOkk

I'm in!

[Getitrt2]

JFT. Good post. I'd like some thoughts and discussion on the following: - operatorship? Who gets it - if enough gas is there for 2 trains, why are we only talking about 1? - what's the deal with govt't take and threat to take or buy up to 50%

Maybe they are talking about 2 trains, but maybe no one is ready to reach a deal on 2 yet.  They left that possibility open.  XOM and OSH are still looking for gas, and IOC is still looking for gas and looking at a Gulf LNG plant.

The government never threatened to "take" more gas, just got an option to buy more at commercial prices.  With this XOM deal, forget about that;  there is no expectation of their buying more.  Expect them to exercise their option for 22.5% at cost and to sell 22.5% of the gas sold to XOM, which probably would be used to pay toward their costs, including in part to IOC for reimbursement of their share of previous exploration and development costs.

I somehow missed some of what had already been posted, petro and others. All intriguing and exciting.

[Getitrt2]

JFT, I would expect XOM to own the same proportion of the CSP and other PRL 15 infrastructure as they do of the gas and condensate resources, although I certainly do not have any inside information on that.

I think LNG in the Gulf is much more likely than at NAPA NAPA. We still have the major issue of the cost of a long undersea pipeline to NAPA NAPA. However, perhaps gas from PPLs 236 and 238 could eventually lead to LNG at NAPA NAPA! I'm hoping this deal also leads to major expansion and acceleration of exploration drilling, as well as appraisal and production drilling. Anyone have any further insight on that?