enterprise valuation, page-16

Agreed that the major Qld LNG projects are experiencing large cost overruns with many questions regarding project returns, but lets not forget that they all need further trains to get their economies of scale benefits from their massive initial investments.

In this regard Queensland Curtis LNG and Gladstone LNG have proposed an additional train each, while Australia Pacific LNG has proposed a further two trains.

Its not as if these LNG projects are being abandoned.

Look also at this article- these projects still need further gas to meet contracted demand on a 2P and 3P basis.

http://www.marchmenthill.com/qsi-online/2012-03-22/queensland-s-csg-lng-gas-industry-will-consolidation-occur-and-what-are-the-implications-

Further in terms of pricing the LNG projects are getting somewhere from $9 to $15 a GJ (I think a link to the oil price so moving prices). Santos and Origin have publicaly talked about a gas price of $8/GJ for long term domestic gas supply. So really in this environment where the price differential between domestic and export pricing continues to compress what price for the last remaining large reserves on the East Coast? Is this resource getting cheaper than deals struck in the past within this dynamic? Where is all the gas going to come from? And more importantly in the short term BOF MUST be seeing that NSW electricity prices rising significantly near the next election will be an absolute majority killer.