(03-05-2014, 02:50 AM)Palm Wrote:Getit,
I echo the good Doctor's thoughts and have to ask, What is it that you seem to see as such a negative point to sending gas to PNG LNG? And if you do not see it as negative, why are you so averse to the thought that this could happen? Low investment, quicker cash flow with probable ownership in those PNG LNG expansion trains can only be a good thing, correct? Then with furrher gas proven up the idea of a new LNG plant only gets better it seems. Again, knowing that they ultimately will choose the quicker and more economical route, and if the first stop on that "line" is gas to PNG LNG, why would that be such a train wreck that you seem to fear?
I can't answer for Getit but I believe I have some of the same views. I am not against sending E/A gas to PNG LNG. I have in fact argued for years that was the most economical and logical choice for first gas, especially after it became widely recognized the current pipe had a tee and could transport 3 trains. What I want to remind everyone jumping on the PNG LNG bandwagon is:
1. There are strong political interests in Gulf Province that have for some time been demanding to have the LNG plant built in their province. What is the price of domestic peace in the construction of these facilities? What is the cost of widespread disfavor and resentment? Lord knows that while XOM had peace in Port Moresby building the LNG plant they had their hands full with the locals out in the Highlands.
2. XOM and its partners evidently have been not all that keen on sharing ownership of their facility as evidenced by months of exclusive negotiations leading to nothing. There is the possibility IOC and XOM got close, only to have their plans rejected by the government. Sure, Duma is gone, but that doesn't mean issues he was fomenting have disappeared.
3. Some may believe that two separate facilities provide greater reliability than a single facility. Any local disruption could certainly cut production, but with two plants the chance of losing all of the country's production should be considerably less. I also suspect should truly major new reserves be located expansion at two different locations likely would go much more quickly.
For these reasons I question whether anyone should believe it should be a slam dunk that E/A's first allocation will go to PM. Total's statement couldn't have been more clear: they aren't rule anything out at this time.