Timing

[Getitrt2]

One way or another you are going to have to get property owners and regional politicians on your side. It isn't a bad estimate that the additional infrastructure to build the Gulf LNG project would take an extra year to design and build when compared to a third train at PNG LNG. Quite a bit of preliminary engineering and site selection has already been accomplished. Much of what needs to be built will have to be built whether it is CSP and pipeline or CSP, pipeline and LNG. Whichever way it goes though, what needs to be done will go considerably faster if everyone is on board and working together. The sooner the better. Let's hope Hession sees this and those drill bits will rapidly make the question of either/or irrelevant. The good news is of course the bits are finally working and (somebody please correct me if I'm wrong) with any luck around the first of the month we should hear about penetration of the top of a gas bearing formation. Best regards,

Train three at PNG LNG would cost the govt of PNG less than a greenfield project and offer a greater return on the investment in a shorter timeframe.  That's a powerful economic argument.

You don't think the PNG government want both?!  Give me a break!!  Why wouldn't they?

You misinterpreted my comment, sorry I was not clear.  I am in no way saying Gulf LNG and train three are mutually exclusive.  I am merely pointing out the economic argument supports PNG LNG expansion BEFORE Gulf LNG.  Not IOC's economics, PNG's.  Ultimately, the decision will be based on what is best for PNG, not what is best for IOC shareholders.  I am NOT implying this is bad for IOC, I think everyone will be happy when all is said and done.

Brew, IMO you are still not being clear.  PNG LNG expansion first from WHERE?  Right now we have a deal envisioning a separate two-train LNG plant supported by PRL 15, which is strongly believed to be adequate for that, and POSSIBLY for more.  That changes if you send 4.6 Tcf of that to PNG LNG, and there is no other currently available or confirmed resource adequate to proceed with the two-train plant deal with Total.  To do both, we need to proceed with Total and find gas from elsewhere for PNG LNG, which is more feasible and even likely, and the intent expressed by Hession as of now.  That is what is best for both IOC's AND PNG's "economics".  Also, if enough gas is found, there is potential for expansion of both projects, the best of all outcomes.