Originally posted by tinhat
I don't follow the PNG project specifics very well because, let's face it, waiting for the PNG project to get off the ground is like waiting for Godot. So this theory may be way out of whack but I'll throw it out there for consideration.
My recollection is that HZN want to strip the condensate out of the Stanley field as a low cost (low capital intensive) way of starting up production and kick-starting the development of the PNG assets. To my ill informed mind, this seems analogous to skimming the cream off the milk. Does the PNG government fear that Horizon may strip out the value of Stanley potentially damaging the economics of the longer term LNG gas extraction and potentially leaving the Stanley field stranded from the Western LNG project? I'm just trying to speculate what the underlying issues are based on my poor knowledge of the project. Frankly I'm a bit confused by it all. I don't even remember what we are giving Osaka Gas for the money we are supposedly going to get from them.
It appears that the PNG government is very keen that the stranded Western Provence LNG fields be aggregated into a shared pipeline to feed the proposed Western Provence LNG plant. Obviously that pipeline is going to be a major development project in and of itself that is going to require significant investment. Additionally, we don't necessarily know what, if anything, has gone on between Minister Pok or anyone else in the PNG government and our new partner Balang International or other entities. I don't know why but I've got a bad feeling about Balang buying up Repsol's share right when Pok is supposedly attempting to cancel one of the key licenses of the project.
It may be that Pok's license cancellation notice is designed to get Horizon and others to sign onto a plan for the development of the fields that differs from how it Horizon wants to proceed with Stanley.
This is all ill informed speculation. I would be interested to hear others thoughts.
Hi Tinhat,
If we assume that Godot refers to the relatively slow French racing cyclist Godeau [pronounced God-oh] (one of the many theories), then PNG will eventually arrive - so we may be edging closer to the finish line. Is this the start of the third Act?
Whilst PNG may never happen, I doubt that your theory is the reason behind the Stanley Fabian Pok's Stanley cancellation saga.
Stanley condensate stripping wouldn't change the value of the gas is the short answer.
Firstly and most importantly, the main game is extract value from the gas. HZN don't care how they achieve this.
HZN has stated that WLNG is their fallback project if nothing better eventuates, so HZN is open to all other options.
They now have access to the Pn'yang pipelines (gas and condensate).
It has now surfaced that Pok wants a Western Gas Hub - new development and subject of this thread.
This could mean some sort of (forced) joint development of Pn'yang and HZN's Stanley, Elevala/Keti, Ubuntu fields.
This could mean Exxon are forced to process HZN's gas through PNG-LNG on reasonable commercial terms.
Please note that this has not even been hinted at.
If PNG-LNG were forced to process HZN gas, then OSH and/or STO would almost certainly purchase HZN's gas/PNG assets.
Whilst PNG may never happen, I believe that there is a good chance that we are slowly inching toward the finish line.
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