02-01-2014, 01:56 AM
"Why would the government pay a much higher price and incur more capex obligations to get some gas for power when they can get plenty from the 22.5%?"
Don't know, but at one time (11/19/2012) it made all kinds of great sense.
"My understanding of all this is as follows. It now appears that PNG will want to exercise its option for an additional 27.5% equity (total 50%) in E/A up front and take it all in conditioned gas, while not participating in the initial 3.8+ mtpa LNG plant to be built by IOC and its new partner(s). This means the initial CSP capability will need to be double what will be required for IOC's Gulf LNG, with the timing of PNG's half dependent upon when they can get power plants and/or a separate LNG facility, etc. in place. It also sounds like Mitsui could end up building all, half, or none, for which FEED is done. I don't think IOC's having and providing enough gas for all is an issue. For PNG's first 22.5% they would be obligated for that proportion of all the costs of E/A development and the CSPs, in return for 22.5% of the conditioned gas. For the additional 27.5% of raw gas they would pay the agreed commercial market price per mcf or other unit, almost certainly based on the price to be paid by IOC's selected bidder, with some possible variation related to payment terms, etc., and maybe some adjustment for differences in handling of condensates between PNG and other partners. They would also be obligated for another 27.5% of the costs (capex and operating) of the CSPs, or possibly they could arrange for their own separate CSPs for their 50% rather than contributing the two proportions for those facilities. Of course, they would have no ownership in nor contribute to the costs of the Gulf LNG plant. "
Agree, let's see how it all shakes out when final agreements are signed and released.
Don't know, but at one time (11/19/2012) it made all kinds of great sense.
"My understanding of all this is as follows. It now appears that PNG will want to exercise its option for an additional 27.5% equity (total 50%) in E/A up front and take it all in conditioned gas, while not participating in the initial 3.8+ mtpa LNG plant to be built by IOC and its new partner(s). This means the initial CSP capability will need to be double what will be required for IOC's Gulf LNG, with the timing of PNG's half dependent upon when they can get power plants and/or a separate LNG facility, etc. in place. It also sounds like Mitsui could end up building all, half, or none, for which FEED is done. I don't think IOC's having and providing enough gas for all is an issue. For PNG's first 22.5% they would be obligated for that proportion of all the costs of E/A development and the CSPs, in return for 22.5% of the conditioned gas. For the additional 27.5% of raw gas they would pay the agreed commercial market price per mcf or other unit, almost certainly based on the price to be paid by IOC's selected bidder, with some possible variation related to payment terms, etc., and maybe some adjustment for differences in handling of condensates between PNG and other partners. They would also be obligated for another 27.5% of the costs (capex and operating) of the CSPs, or possibly they could arrange for their own separate CSPs for their 50% rather than contributing the two proportions for those facilities. Of course, they would have no ownership in nor contribute to the costs of the Gulf LNG plant. "
Agree, let's see how it all shakes out when final agreements are signed and released.