Could be a number of scenarios that may unfold. The total volume of gas between Lockyer, North Erregulla, West Erregulla, Erregulla Deep, Moriary etc etc. may already be 1000-1500Pj plus, enough to supply a Waitsia size plant for 12 to 16 years plus. An 87Tj plant would last 30-50 years. They are still exploring, look at how much gas has been discovered in the last 3 years, and Gina has a lot more ground to drill to the East of Moriary, add in Strike's A&K out there as well. There is definitely room for another plant/s. No one would plan to leave gas in the ground too long with possibilities of political pressure/change, new tech and power generation, they will push along asap. Gina could go via Waitsia for a period but she isnt desperate for cash like STX, Mitsui and Beach are and will want to cash in as much as they can in the short term to take advantage of export market. The other thing is the toll rate will be influenced by the high OPEX and huge cost blow outs with Clough going bust mid project resulting in nearly double the cost.
Scenario where the STX/Gina JV is maintained and Gina builds a Waitsia size plant on her hobby farm, it could be tolled or STX chips in. Neither of those sound appealing as a plants of that size takes years to build and we have seen how that nearly sunk beach, STX would be a sitting duck for receivership.
The more I think about it, WE and the JV is causing a lot of headaches for STX. Strike a deal with Gina once survey results compiled and let's move on.
STX Price at posting:
18.0¢ Sentiment: Buy Disclosure: Held
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