Total to market Papua LNG

[Tree]

Total to market Papua LNG

On display: tribesmen in PNG

Russell Searancke 

 30 July 2015 03:02 GMT

Total has indicated it wants to have committed liquefied natural gas buyers before making a final investment decision on the Papua LNG project in Papua New Guinea.

Total's chief financial officer Patrick de la Chevardière said in a results teleconference that the company wanted to sell the Elk-Antelope gas to third-parties "to be in a position to FID this project".

"We are currently working on the legal framework of the project. We will start, maybe, to estimate the overall cost of the project. But it is a very early stage at the moment. Keep in mind that there is no rush. We need to see the cost going down."

Papua LNG is based on feedstock gas from the onshore Elk-Antelope fields in Gulf Province.

The owners Total, Oil Search and InterOil earlier this month selected the sites for their LNG plant and central processing facility, but are still busy with appraisal drilling and deciding on LNG train specifics and production capacities.

They intend to move into the front-end engineering and design phase next year.

The Elk-Antelope fields are located in Block PRL15 which, along with Papua LNG, is owned by operator Total (40.1%), InterOil (36.5%), Oil Search (22.8%) and minority interests (0.5%).

[Palm]

I thought the project was in slow-down mode!

Gotta love the pics these guys choose for these stories. "Yes, this is the new head of Total's LNG sales team Jaque L'Banque. He can't wait to get his sales and marketing team on the road."

[Tusker]

A very impressive tip of the spear. Simply sending a message. Thanks for pointing out the direction.

[ArtM72]

""We will start, maybe, to estimate the overall cost of the project. But it is a very early stage at the moment. Keep in mind that there is no rush. We need to see the cost going down."

Yeah. That's encouraging.

[my2cows]

It's prudent, and makes complete logical sense. That's a message to shareholders and to buyers. Additional LNG plants will not be built without long-term contracts.

[cybersssss]

So by that logic Art, if the results of that basin are inconclusive or not what you may think, would you then concede that IOC should be sold for under 100 dollars?

[davidhmtk]

Why did Total give this reporter this statement ?

a.  No plan, just an off-the-cuff comment

b.   To put price pressure on suppliers and buyers

or  c.  Prep to a takeover

While "b" is possible; to me, this is the first real evidence of "c".

[jft310]

Did Exxon takeover Oil Search ??? Start there with PNG history .

[Tree]

Good Grief a bit of over thinking here. At the risk of being redundant.
LNG projects are some of the most expensive/difficult projects undertaken by private enterprises in the history of the world.
For FID, they require:
1) ample supply feed-stock - Hence re-certification
2) ample LNG OT's upfront (typically ~75% of capacity) - Hence more than casual discussions with buyers
3) ample IRR. - Hence how much does an MCF cost us and for how much can we sell an MCF.

TOT Papua LNG JV is in Pre-FEED
FEED can progress only after re-cert and builds upon Pre-FEED
FID is taken only after FEED shows that YES, Papua LNG will deliver the desired IRR.

These suits are smart enough to let the process play out and their comments on the process will be conservative and measured. The fact we are in this process and that hundreds of millions are being spent on this process tells us these suits are quite sure FID is a foregone conclusion.

[davidhmtk]

Good Grief a bit of over thinking here. At the risk of being redundant. LNG projects are some of the most expensive/difficult projects undertaken by private enterprises in the history of the world. For FID, they require: 1) ample supply feed-stock - Hence re-certification 2) ample LNG OT's upfront (typically ~75% of capacity) - Hence more than casual discussions with buyers 3) ample IRR. - Hence how much does an MCF cost us and for how much can we sell an MCF. TOT Papua LNG JV is in Pre-FEED FEED can progress only after re-cert and builds upon Pre-FEED FID is taken only after FEED shows that YES, Papua LNG will deliver the desired IRR. These suits are smart enough to let the process play out and their commenvts on the process will be conservative and measured. The fact we are in this process and that hundreds of millions are being spent on this process tells us these suits are quite sure FID is a foregone conclusion.

Overthinker, my new motto.  Everything the Total guy said is true and "b" is possible.  But saying they are going slowly will piss off all the other partners (I'm including the gov't, who with their back-in, and taxes on incomes and goods moving in and out, is focused on getting this done quickly).  I think "a" is unlikely.   So your theory is that they are willing to annoy the 3 partners to get leverage on buyers and suppliers before they decide what size they are building?