5 + 3 = 8
XOM has 8 train plans for PNG.
XOM stated PNG LNG site is designed to host 5 trains. Gulf LNG designed for 3 train by 2020.
PNG LNG - OSH may contribute to 3rd train and appears XOM eyes E/A for 2 additional trains.
Gulf LNG - XOM is paying to drill E/A, condition and deliver gas to the Gulf to feed a new subsea pipeline to PNG LNG. Doesn't it make a bit of sense for XOM/IOC to drain PRL15 and Tri (if needed) up size the CSP and dry gas pipeline to Gulf coast, feed dry gas to Gulf LNG project and partner in Gulf LNG? That is, if XOM can compete with the other bidders to be the winner of IOC's 'optionality' in how best to develop Gulf LNG. The IOC LNG investor presentations show integrated ownership and with XOM pegged as upstream PRL15 operator their economics are hard to beat. Just like the economics of Gulf LNG modular are hard to beat. There is a way that FID is immediate on both PNG LNG expansion and Gulf LNG.
May 14, Q1 CC presentation:
PNG Cabinet Conditionally Approved InterOil’s Gulf LNG Project
The InterOil Board of Directors has empowered management and advisors to swiftly bring forth the best transaction to maximize value for all of our stakeholders
InterOil, and the partner we select, plan to form a Joint Venture which will be aligned to bring an LNG processing facility to Papua New Guinea of a nature and in a manner which will be satisfactory to the State
With the incoming partner, the Joint Venture intends to finalize the development plan for the Gulf LNG project and complete the proper documentation to move the Gulf LNG project forward
The Gas Agreement with the PNG State, which supercedes our 2009 Project Agreement and controls the project development, should be finalized with the LNG partner we select
*****
May 24, 2013:
Port Moresby and Houston, TX — InterOil Corporation (NYSE: IOC) (POMSoX: IOC) (“InterOil” or the “Company&rdquo
and its joint venture partner, Pacific LNG Group, have entered into exclusive negotiations with ExxonMobil Papua New Guinea Ltd., a subsidiary of ExxonMobil (NYSE: XOM), on the development of Petroleum Retention License 15 (PRL 15), which comprises the Elk and Antelope fields in the Gulf Province of Papua New Guinea. The transaction has been discussed with the Government of PNG and any future agreement will be subject to their final approval.
Items under consideration include:
- InterOil and Pacific LNG selling ExxonMobil Papua New Guinea Ltd. an interest in PRL 15 that is sufficient to supply gas to develop an additional LNG train at ExxonMobil Papua New Guinea Ltd.’s Konebada site. There will be staged payments before and after production commences.
- InterOil and Pacific LNG will be funded to drill additional delineation wells in the Elk and Antelope fields, which will be followed by recertification of the resource.
- InterOil and Pacific LNG will have the optionality to either independently develop a second LNG project in the Gulf Province that may also use gas from PRL 15 and potentially other discoveries, such as Triceratops, or pursue further development with ExxonMobil Papua New Guinea Ltd.