Citi on OSH: PNG LNG on track

[Petrovale]

CSFB (23/07/2013) A fourth train could add another risked $1/sh to our valuation, slightly less than T3 given that additional infrastructure needs to be expanded (e.g,. pipeline, jetty, storage). Conversely, if drilling results prove better than expected at Elk/Antelope (Interoil was talking up a 7tcf+ resource), P'nyang gas may not be needed for a long time. A development plan is required by March 2015 to maintain the license. Of course, if trains 3 and 4 are jointly developed (for capex of +$15bn?), OSH would be required to provide its share of equity funding. That would be no bad thing given IRRs of mid-20% levels.