Rigg predicted Sino Gas will attract a rival bid from a U.S., European or Asian group as most of thpe geological and well engineering risks on its project have been dealt with.
“It’s a reasonably safe entry into a growing gas market,” he said.
China stock market currently took a tumbles. Dropped 20% approximately since January this year.
Surely some of this money looking at more certain and better return in the next 5 years. And SEH is one of those investment that meet that criteria. Growing demand, huge cashflow in next few years, excellent margin, safe and stable commodity market of gas in China. If Lone Star deal is off, I am pretty sure another will come at a higher price in the near future as SEH became more mature.
There are pressure from Central government for CUCBM and CNOOC to have this project moving. Remember approximately 70% of this project is owned by Chinese themselves, so they have interest to get this project going too. Energy mix policy from central government is not going to change overnight. They want to diversify their energy sources need locally too. They pay too much for import. Geopolitical risk is greater with Trump in charge.
GC is probably busy answering lots of questions from Lone Star or maybe other suitor. After all Lone Star will be the only one for him to answer to if this deal going through. Let him concentrate on his job to get this project going smoothly.
Enjoy dyor
SEH Price at posting:
22.5¢ Sentiment: Hold Disclosure: Held
