11-16-2012, 01:26 PM
'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 we agree 100%. Its possible PNG govt buys IOC NG at maybe $2.85 the PRE price metric,IOC makes money. Then Exxon buys from the PNG govt at the $5-7 and then PNG govt gets money to build infrastructure. Could happen. Exxon agreement is just terrible for the people of PNG. Exxon has contracts to sell their LNG at $16 mmbtu. Poor Exxon only makes 100% or so on their money.IOC and the PNG govt do quite well in this scenario