The LNG Plant
One of the interesting clarifications, for me at least, coming from the AGM was that the SPA agreement does not include where and what technology is used to liquify the NG. Determining the plant location and type is essentially left up to XOM. Now with that being said – Wayne stated that while he doesn’t know what XOM will do (LOL, yeah right), it didn’t make any sense to him for XOM to not use the gas at a third train in Port Morseby.
So once the SPA is complete – then XOM will presumably begin negotiations with its partners to determine the terms of using IOC gas at PNG LNG train three. FWIW, I believe that IOC is asking for ownership of a considerable portion of the third train. If this hypothesis has any truth to it, then this will be part of the discussions that XOM has with OSH, Santos, etc. To be repetitively clear, this negotiation will occur once the SPA agreement is completed.
Speaking of XOM, IOC is now in bed with a control freak. It was made clear to me that the press release in May, regarding exclusive negotiations with XOM, was almost entirely written by XOM. Multiple times I was told that IOC now needs to seek clarification from Exxon if they want to issue anything public related to the sell down. Additionally XOM has told IOC that if anything is leaked about this deal, they will initiate aggressive legal action and they will also drag out the SPA indefinitely. So for those people who were getting frustrated with Wayne saying “we will release those details when the process is done”, you now know why.
So with IOC presumably sending gas to the PNG LNG plant it would make sense to rinse and repeat this process for every additional 4.6 Tcf of gas the company finds. I asked the question if the Gulf site was no longer on the company radar and was told this is a bad assumption and that IOC does indeed have future plans for the Gulf.