07-24-2013, 02:59 AM
I believe you are correct STP. PNG LNG was approved for the first 2 trains of output. Any expansion (per Duma) must be approved by the government, meaning enough gas must be proved up and all partners would have to agree to be in, and pony up for their share of costs. I'm guessing that current partners have a sort of right-of-first-refusal on an expansion, but likely there is also an agreement that upon expansion partners must be willing to give up a % to a new approved partner, especially where that partner is bringing the source due to lack of available source from existing partners. As Operator XOM must be sure there is source, and OSH was the exploration partner charged with sorcing gas for trains 1 and 2. The question is what we have now. It appears XOM and PNG want to expand PNG LNG as quickly as possible and the "best" source may well be IOC's. XOM and PNG hold a lot of decision-making power in this IMHO.