WCL management want to get 2 or 3 times the current price to enable them to project finance development of the Meridian & hopefully Paranui fields. What are their prospects of achieving this?
AGL is the current principal customer. As a wholesale buyer of gas with only domestic customers, would they be prepared to pay such a large increase in price? I doubt it. They have been storing pre-start-up gas from the Curtis Island LNG projects in the Mosaic Oil storage areas to sell back at higher prices on start-up.
How about Origin for export through their LNG plant on Curtis Island? I doubt it as they have already forward sold gas to some of the LNG projects.
How about QGC? I doubt it as they are only going to be producing gas from about 20% of their exploration areas and they appear in no hurry to widen their exploration programme at present - deferring expenditure for a few years - e.g. with JV areas such as with SXY.
How about STO? I doubt that too as I think it is far more likely they will source additional gas from the Cooper.
How about LNG? I reckon this is WCL's best chance of getting the prices they would like - but can LNG attract the resources to run FL in parallel with Magnolia? If this is the best option, no wonder it is frustratingly drawn out.
WCL Price at posting:
28.5¢ Sentiment: None Disclosure: Held
