Pandora's Box open?

[ValueSleuth]

This was posted on Yahoo recently.

If true, pandora's box has been opened, including consideration of EWC/FLEX LNG program.

VS

Hey VS,

I believe a friend of mine, who attended the AGM, recently asked a member of the executive if it was possible for EWC/FLEX to be back in the picture with the improved situation with the government.  The answer was no, they are too far down the path with the selldown.  I won't discount some form of modular/floater at Triceratops, but unlikely if they build a traditional plant on the coast as it would be much easier to tie into that existing infrastructure.

What is your rationale/source for thinking EWC/FLEX is possibly being reconsidered?

Health and Happiness,

hemi

With respect to EWC/FLEX I was thinking of Triceratops.  If I were IOC, I'd be attempting to get some kind of a commitment from the government to consider EWC/FLEX in the future, and get as much of a commitment as they can now.

The rationale is, as it always has been, that EWC/FLEX is economically compelling for all parties.

Given the costs associated with stick-built plants, even the reduced marginal cost per LNG ton of additions to stick-built plants, I suspect that the EWC/FLEX arrangements are still cheaper.

The question is whether PNG is willing to concede anything to InterOil at this point.

VS

With the work towards FIDs that's already done, a project with EWC/FLEX would probably also be quicker to production.

Amen!

That's one of many points in favor, but the politics seems to be trumping economic rationality.

VS