07-26-2012, 10:54 PM
'Tree' pid='7276' datel Wrote:It's looking like an LNG floor will not exist. IF JP/SK succeed in de-linking LNG from oil parity pricing and US Shale boom yields LNG projects Aussie projects will be at risk. The tipping point for projects will be ability to compete with US shale, and those costs are substantially less than Aussie's. The future may be in upstream ownership rather than strictly sales as a result.
As pointed out in the recent Economist article on NG/LNG, it will take many years for Henry Hub gas to significantly alter the current pricing mechanisms in a material way.
The higher cost Aussie projects are in trouble just on the basis of non-US LNG projects, as long as the vast majority of LNG pricing is by linking to the world price of crude oil.
In any event, the InterOil resources are GOLDEN given their finding cost.
....and ff Henry Aldorf gets his way -- perhaps on some facilities IOC eventually builds per Henry's Gulf plan -- the profits will just gush to IOC. I definitely expect this on one or more of the eventual number of reef structures to be found on InterOil acreage.
VS