11-16-2012, 07:09 AM
(This post was last modified: 11-16-2012, 07:16 AM by CesiumFormate.)
'petrengr1' pid='12646' datel Wrote:I have not discussed this with the Company but my guess is that the Government will still have to pay a tolling fee for the CSP and pipeline. They will also have to pay their share of the sunk cost for the field development. “In Kind” means they will take their share of the gas (22.5%) as “dry gas” instead of money. They then have the option to use the dry gas for any purpose they want without having to pay for 22.5% of the LNG plant. They will also be entitled to 22.5% of the condensate but they may prefer to let IOC handle it for them for cash instead of taking it "in kind". They could use their gas for power generation, fertilizer plants or any other gas based industry. Here is one for you from left field. They could sell it to Exxon while they are waiting for their Power Plants, distribution network and Fertilizer Plants to be built. They could probably get $5-$7/MCF for it without having to pay for an LNG plant. Just something that occurred to me and, therefore, just an opinion
Pet,
I don't think that is from left field at all. Getting gas to the Exxon plant from E/A helps everyone. I believe I posted a couple of months ago that I thought that the Exxon plant would be the quickest way to get FID. Once the gas is no longer stranded, the resource can go on the books even if IOC does not get cash flow from it. It would only take an approved plan to get gas to the Exxon pipeline. The FID on the 3.8 MTPA plant then becomes a secondary decision albiet, very important for cash flow.
CF