Over the past few years I have noted the following about Browse.
1. I don't think WPL really want to develop it at JPP 2. Barnett wanted it done at JPP to save face (I also don't see how can you lose jobs that haven't been created yet) but with the election over he may concede to alternatives 3. FLNG presents it own challenges, including long lead times for ship building, higher maintenance costs, less production capability (you'd need 4 ships to match NWS or Pluto volume) 4. Gas prices are falling and prices that need to be negotiated for expiring WPL contracts with Asian suppliers will be much less the previously agreed due to US gas entering the fray. 5. The AUD is still too high as are construction costs.
It is for these five reasons, that I expect WPL will announce a decision to delay Browse development until 2015 or later. It gives them time to obtain clarity and better results for all possible outcomes.
In the meantime, they can focus on Myanmar and Israel. This announcement this year will be a boon for shareholders, and could drive the stock up as much as 10%, when it happens.
Anyway, just my 2c worth.
WPL Price at posting:
$36.75 Sentiment: Hold Disclosure: Held
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