bpmigas rejects development plan for sengkang , page-7

The article and the dialogue from BPMigas is actually incredibly misleading on the face of it.

On first reading, one thinks this news relates to more delays. However on deeper reflection and on speaking to three or four other well informed holders last night it actually alludes to something very positive. It's exactly as Pihrana stated, it actually indicates the huge value that is being placed publically on the Sengkang LNG project. This is final quarter pushing and shoving between the big guys.

I looks like some last minute political jostling is being played out by BPMigas or parties associated with BPMigas. Stewart Elliott has been down this path before. He is one of the best negotiators to be handling this often tricky procedure in dealing with governments and their various divisions all wanting a little extra. He is Asian business savvy and ruthless in negotiating the best deal for EWC whilst delicately steering the most appropriate path through any government hurdles.

There is a legally binding non disclosure agreement in place between BPMigas and EWC relating to anything to do with the Sengkang project so the leaking of this information to reporters also indicates final 12th hour jostling for a little bit more of the pie. It also illustrates the delicate nature of EWC being hog tied in relation to not being able to release any information without the nod of BPMigas. A bit one sided at this stage I know but this is part of this final stage.

If EWC have to adjust the numbers relating to the financial distribution of their huge LNG reserves then that is all part of the normal commercial wrangling for a bit more here and maybe a bit less here.

Let's be realistic and not underestimnate the power of BPMigas hwoever the Government wll ensure this project gets fast tracked if there are too many more institutional delays. The local demand for LNG gas and power is just too great for them to allow too much more grandsatnding by anyone.

I actually thought this first part of the project, the first two 500tpa LNG trains could proceed based on the existing reserves that have been formally certified. That would explain why some of the components from Europe and the US are on the water. If anyone has the definitive answer on this they can let us know.


There may be a bit of selling on Monday based on this press release however I think that there will be a lot of easy topping up by the investors who understand the bigger picture. Get the last quarter pushing and shoving out of the way and we will be kicking with the wind behind us.

The important thing to remember is nothing has changed with this LNG project. Pay back time is low, the profit from the first two trains will roll into finacing the next two then the next two and so on. The Sengkang power plant will be up to full speed again soon, and expansion plans are progressing.

Mont