I guess I question this idea of the discount on the first deal.
1. If the resource is what we all believe it to be; high quality, low cost to develop, liquid rich, basically one huge reservoir, then it is less risky than most other resources in the world.
2. PNG as a country is a much better risk compared to a) itself just a short time ago b) Australia in regard to not being (yet unproven) CSG, which is higher in pollutants and very very dry and c) African offshore.
3. PNG LNG is very quickly approaching production. Great article in Friday's PNGIndustry News discusses the progress and mentions they could be producing in 1Q 2014. This will be on schedule and highly supported by PNG government. This greatly due risks IOC's project.
"DESPITE the doubts and unexpected delays affecting various project sites, the $US19 billion PNG LNG Project appears on track to deliver first gas, and export LNG, by the middle of next year. By Wantok"
http://www.pngindustrynews.net/storyview.asp?storyid=795157756§ionsource=s0
IMHO the IBs will be throwing the above at bidders as support for a more fully valued /mcf price. Word is also that the PNG govt has been supporting a fair price; value is what royalties are based on.
We shall soon know, but with all the development IOC has already done and the de risking of PNG, I like our chances of higher prices.
1. If the resource is what we all believe it to be; high quality, low cost to develop, liquid rich, basically one huge reservoir, then it is less risky than most other resources in the world.
2. PNG as a country is a much better risk compared to a) itself just a short time ago b) Australia in regard to not being (yet unproven) CSG, which is higher in pollutants and very very dry and c) African offshore.
3. PNG LNG is very quickly approaching production. Great article in Friday's PNGIndustry News discusses the progress and mentions they could be producing in 1Q 2014. This will be on schedule and highly supported by PNG government. This greatly due risks IOC's project.
"DESPITE the doubts and unexpected delays affecting various project sites, the $US19 billion PNG LNG Project appears on track to deliver first gas, and export LNG, by the middle of next year. By Wantok"
http://www.pngindustrynews.net/storyview.asp?storyid=795157756§ionsource=s0
IMHO the IBs will be throwing the above at bidders as support for a more fully valued /mcf price. Word is also that the PNG govt has been supporting a fair price; value is what royalties are based on.
We shall soon know, but with all the development IOC has already done and the de risking of PNG, I like our chances of higher prices.