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.
Of course, PNG will use some portion as determined by them of their gas for power production as discussed elsewhere. Other possible options they may pursue:
-to feed industrial plants of some sort.
-for an LNG project between Petromin and partner Shell. This conforms to their desire to develop Petromin as an NOC.
-for sale to PNG LNG for some period of time.
-for an LNG project with some Chinese or other partner.
Funding for PNG's gas purchases from IOC and/or CSPs could come from their Chinese loans, banks, and/or various project partners.
This certainly looks like a win/win to me. For IOC, it looks like they are going to have more gas before long than they know what to do with; and all this monetizes more gas and generates more cash flow sooner, including allowing it and its sell down partner(s) to develop the Gulf LNG project in the phased manner they consider best, and own 100% of the first phase, as well as apparently getting IOC better bids in the sell down process! If I understand all this properly, the more I learn, the better it sounds for PNG and for IOC and its shareholders. Dang! I wonder how that could be, with this "terrible", "fraudulent" management with so much ownership!! Watch out, shorts!!!
Of course, PNG will use some portion as determined by them of their gas for power production as discussed elsewhere. Other possible options they may pursue:
-to feed industrial plants of some sort.
-for an LNG project between Petromin and partner Shell. This conforms to their desire to develop Petromin as an NOC.
-for sale to PNG LNG for some period of time.
-for an LNG project with some Chinese or other partner.
Funding for PNG's gas purchases from IOC and/or CSPs could come from their Chinese loans, banks, and/or various project partners.
This certainly looks like a win/win to me. For IOC, it looks like they are going to have more gas before long than they know what to do with; and all this monetizes more gas and generates more cash flow sooner, including allowing it and its sell down partner(s) to develop the Gulf LNG project in the phased manner they consider best, and own 100% of the first phase, as well as apparently getting IOC better bids in the sell down process! If I understand all this properly, the more I learn, the better it sounds for PNG and for IOC and its shareholders. Dang! I wonder how that could be, with this "terrible", "fraudulent" management with so much ownership!! Watch out, shorts!!!