New Upstreamonline article on IOC’s deal with XOM

[Tree]

..... The only possible 'new insight' in this article is in the last sentence. P'nyang is OSH field which is not included in the PNG LNG gas agreements and are basically on equal footing and competing with E/A gas for PNG LNG expansion feedstock. Cost, delineation and speed to market all favor E/A over P'nyang. This is why XOM seeks E/A gas, P'nyang is not a best option for expansion gas.

I suspect you may be wrong here.

P'nyang gas is also owned partially by the 2 major partners of PNGLNG (XOM and OSH).

There is no reason why they would not use it as purchased external feedstock for the PNG LNG project , just the same as the E/A gas as purchased external feedstock also for the PNGLNG project.

OSH has always said (I have not tracked the XOM releases) in various documents that the P'nyang gas was going to be processed in the 3rd train at PNGLNG and that the PNGLNG partners were already doing the planning for this as the 3rd train.

The E/A gas was always planned as the 4th train as the PNGLNG plant is layed out to accept new trains in pairs as the most efficient build format.

Anyway we will know soon enough when the official releases happen.

Of interest , please dont hold me to it 100%, but I vagely remember reading  (I think it was in one of the OSH releases) that the new 3 an4 PNGLNG trains would not start being built untill the end of 2014 so that is why the final deliniation wells for P'nyang gas will only be started some time early in 2014. First LNG for 3 and 4  should therefore be some time in 2017.

*  An alternative is the remote and higher-cost P'nyang field, which is NOT part of the PNG LNG project and needs a gas sales or unitisation agreement between partners

syd, the above is from the June Wood Mackenzie report on the IOC/XOM deal I posted.  The rub is neither P'nyang or E/A gas is part of the PNG LNG project or has an in place SPA or gas unitisation agreement in place.  The choice for XOM is to pursue delineation and agreements in higher cost remote P'nyang which requires a 120 km (from memory) pipeline to tie into existing infrastructure or buy much cheaper, easier to aggregate E/A gas.

http://shareholdersunite.com/mybb/showthread.php?tid=3974&highlight=wood+mackenzie

This report received little interest but it is chock full of great info.

Unitisation is a big deal and is why TOT/OSH are paying for work around Tri.  If Tri extends into their leases they will be part owners based on the reservoir locale.

*  An alternative is the remote and higher-cost P'nyang field, which is NOT part of the PNG LNG project and needs a gas sales or unitisation agreement between partners