TMT will pipe gas, so will AVL. Will we have side by side pipelines? No.
Neither can look to JV anything without end offtake SH consent so each will prepare and budget for an estimated $30 - $50m spend. TMT exploring alternatives is fine but I think the outcome is inevitable.
Costs above are after discussions this week with a gas pipe company CEO and CFO who gave me their charge out of $300k / Km (at 100% margin) for a dual gas / water line. Considering I don't know gas I thought this was important and these guys certainly put the issue to rest as a pretty simple task.
This cost is for relatively short stretches from pad to mainline and could expect a large single contract to be at lower margin. We don't need water so will also save up to 1/3 from this base.
160km x $200 = $32m
160km x $300 = $48m
Interesting that TMT have a $60m contingency built into their CAPEX. Some of this will end up here. - Opinion
TMT Price at posting:
45.0¢ Sentiment: Buy Disclosure: Held
