dr11 no hydrocarbons, page-29

This article is exactly why TTE needed to maintain our interest in DR11.....

http://www.smh.com.au/business/high-wages-drive-lng-projects-offshore-20130426-2ik3q.html

Floating LNG may be almost 20 per cent cheaper than building a project on land for Woodside and its partners in the Browse project, including Shell. Using three offshore vessels to produce the gas would cost an estimated $35 billion, compared with a cost of $43 billion for a new development on land, John Hirjee, an analyst for Deutsche Bank, wrote in an April 12 report.

That's a cost of $2.92 billion per million metric tonnes of output for a floating LNG project producing 12 million tonnes a year, compared with a $3.58 billion cost for a conventional plant.

Of the 90 million tonnes a year of new projects that need to be approved globally in the next three years to satisfy LNG demand by the end of the decade, as much as a third may come from proposed floating LNG plants and expansions of onshore developments in Australia, he said.







Note the comments about onshore developments and also think about those numbers for a minute.....

They are looking at options (floating LNG) for spending $2.92b per million metric tonnes of LNG. 1 million metric tonnes of LNG equates to 48.7 billion cubic ft of NG

In the TTE presentation (May 2012) there is an estimated (by Dept. Mines & Petroleum) 9-12tcf of shale gas in PB.

Divide the 9tcf (minimum range) by this 48.7 billion (for the LNG equivelant) and you end up with about 184.....

Now times this 184 by the $2.92b (that they are willing to spend per million metric ton of LNG) and you end up with a number somewhere in excess of $500b....!!

I am not suggesting that this money is what will flow onto the PB, as there are many factors at play here (one being they would really only save on the capital of offshore drilling and the pipeline costs - bearing in mind these are very high!!).........

.......but the point I am making is that if they are willing to spend this sort of money ($2.92b for floating LNG with massive technical risks) and think it is cheap (by comparison to onshore plant from offshore supply) then if they can get their hands on a resource that can lower the capital cost even further then where would logic think they will head towards....??

DR11 is an asset worth making sure we do everything to hold onto.