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10-16-2012, 08:44 PM
(This post was last modified: 10-16-2012, 08:54 PM by Tree.)
Thanks Justin! Nice DOT here. Just how to connect it??
"offers to split ownership of Elk and Antelope's resources equally, with InterOil and its partners holding the right to develop the first 4 trillion cubic feet of natural gas and use it to supply their proposed Gulf LNG export facility, designed to produce 3.8 million metric tons of LNG a year." 3.8 Mtpa is EWC and FLEX, that scheme has been abandoned we've been told
"the proposal gives Papua New Guinea the right to the next 4 trillion cubic feet of gas supply from the Elk and Antelope fields that it could use for a smaller LNG project as well as meeting domestic power needs." EWC type power plant and a dry-gas sales agreement with XOM with OT going to China? (edit- 4TCF yields 85MT LNG, perfect for a PNG LNG expansion and 25 yrs. production)
"(larger interest)...in the Elk and Antelope gas fields "on commercial terms reflecting market value to be agreed with the upstream participants', targeting a binding deal by the end of December." Chinese fund PNG's extra share?
"Papua New Guinea's Prime Minister Peter O'Neill and Energy Minister William Duma recommended the National Executive Council--the country's cabinet known as the NEC--approve changes to the Gulf LNG project." Sounds like Gov't support, final project clarification and almost time to name names.
ps - this ties back to Duma's comments this weekend which ensures Gulf LNG has enough gas to expand to 12Mtpa and more importantly keeps Kavo happy by getting his project while signing off on some gas processed at PNG LNG.
"I am also conficent that the Triceratops discovery will bring more resources to the InterOil LNG project with additional benefits for the people of the Gulf area and the country as a whole", Mr. Duma said.
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Per Wayne yesterday, the 4 mtpa would likely be conventional and the hope would be that any expansion would allow EWC/FLEX technology. We had discussion about modular and he said that concern is with mid-sized modular as we have discussed before. As we have, he mentioned Gorgon being a large modular and that is fully acceptable.
So now we await any official reaction. What will this all translate into over next few days?
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This plan reminds me of the one that was mentioned in the PNG Industry News and said we should expect a big announcement. Instead, this time it is in the WSJ: http://online.wsj.com/article/BT-CO-2012...eHeadlines
So, if this is the case, I am pleased for PNG to own more since it will benefit the people of PNG, which will also benefit IOC, as long as it is a market price. Also, to remove any perception of PNG strong arming IOC the sell down should come only after NEC approval. Also, as a shareholder I would like more transparency process, but such is unlikley. We know that with the PNG LNG project PTT bid more, but XOM got it. Does this mean that the bidder supplying money to PNG will set a below market price? My hope is that there are at least 3 buyers, e.g., PNG, Chinese firm (assuming this is the motivation for the loan from China), and maybe JKM. And theat they all pay the same price, of course, still the chance of collusion, but the more the better.
Another thought, a 6 billion kina loan is a little less than 3 billion USD. Surely a decent portion of that would be used to fill the PNG budget gap, so leaving maybe 1.5B USD to buy into E/A. How much do they hope to buy at a market price? At 1/mcf that will buy 1.5 tcf, but the AGL Nippon transaction was at ~2.20/mcf. So again, it comes down to judging market price.
Best,
Sam
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check out the pre market price, up $4.45 @ 8:18
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The interpretations of this proposal...and it is just that, a proposal...are dizzying. I doubt though there is a first 4 four trillion and second four trillion.
One scenario for this proposal would be IOC sells PNG 4 TCF which then PNG monetizes with an agreement to send through the XOM pipeline to Port Moresby. That agreement would then provide collateral for any loan PNG might get from China or anyone else. IOC gets enough up front money in the deal to move forward with its development plans together with future cash flow from the selldown as the gas gets sent to Port Moresby.
Dizzying, but it would make some sense in terms of speeding cash flow for PNG and solving their problems with financing their 22.5% obligation.
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So now the only question we should be asking is "what is Market Price"
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'sltibbs' pid='11255' datel Wrote:This plan reminds me of the one that was mentioned in the PNG Industry News and said we should expect a big announcement. Instead, this time it is in the WSJ: http://online.wsj.com/article/BT-CO-2012...eHeadlines So, if this is the case, I am pleased for PNG to own more since it will benefit the people of PNG, which will also benefit IOC, as long as it is a market price. Also, to remove any perception of PNG strong arming IOC the sell down should come only after NEC approval. Also, as a shareholder I would like more transparency process, but such is unlikley. We know that with the PNG LNG project PTT bid more, but XOM got it. Does this mean that the bidder supplying money to PNG will set a below market price? My hope is that there are at least 3 buyers, e.g., PNG, Chinese firm (assuming this is the motivation for the loan from China), and maybe JKM. And theat they all pay the same price, of course, still the chance of collusion, but the more the better. Another thought, a 6 billion kina loan is a little less than 3 billion USD. Surely a decent portion of that would be used to fill the PNG budget gap, so leaving maybe 1.5B USD to buy into E/A. How much do they hope to buy at a market price? At 1/mcf that will buy 1.5 tcf, but the AGL Nippon transaction was at ~2.20/mcf. So again, it comes down to judging market price. Best, Sam
Sam,
I think that IF any of the China loan is going to be used on a possible government buy-in most of it will be backloaded; even the market price portion. The deal would have to be structured that IOC gets an adequate portion of cash upfront. For that to happen the market price would have to be a little higher IMHO to allow for this later payment. Yesterday WA stated that IOC and PNG gov are aligned in their vision. I think that's good.
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Does anyone know, with any degree of certainty, how this info arrived at the desks of the WSJ?
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'Petrovale' pid='11278' datel Wrote:
Does anyone know, with any degree of certainty, how this info arrived at the desks of the WSJ?
Don't know Petro. Probably a safe bet that it's the same way the JKM lashup to bid on E/A info hit his desk last Feb.
This Dvid Winning guy has had a few nice leads.
http://shareholdersunite.com/mybb/search.php?action=results&sid=620b9f488e37a3ff118c81d32950e86e&sortby=&order=desc
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This was a letter from Liquid Niugini to who? The NEC? Petromin? DPE? Oneill? It's interesting that the article doesn't state this. My gut is it went to DPE/Duma and probably copied to O'Neill. I would guess IOC is not pleased that this got out. If it's traced back to Duma somehow, he should be the ex-DPE Minister.
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