did nelson sell out too cheaply??

Copied from the EXC thread. Did Nelson consider this scheme when deciding a price re the AOE deal?

Australia

While the coy remains focussed on Indonesia in the short-term, Elliott is aggressively pursuing his Queensland rollout. As the big boys fall over themselves in Gladstone, Elliott is 200km north at Abbot Point. Its early days but the coy is planning to construct a $1bn pipeline known as the Queensland Gas Highway which runs from Abbot Point to the Cooper basin; a port and LNG facility and a power station. To date the coy has received preliminary approvals/licenses for the port and the highway.



Gas supply will be via EWCs owned and operated gas fields at Eromanga and from 3rd party players in the Bowen Basin. As with Indonesia, Elliot will be utilizing his revolutionary low cost modulized LNG train in Qld which costs cUS$200m per 1tpa. From Queensland, the target is 2mtpa by 2012 moving to 5mtpa by 2015.



In effect, Indonesia will be seen as a test case for all EWCs future projects: gas field, LNG facility and power plant utilizing its low cost medium sized, modulized LNG train.

Discussions continue with the Abbott Port Authority to build a 450MW power plant.

Construction of the pipeline: Tenders have been received which put a $500m cost on the 950km pipeline well under the coys original budget. Rollout will be 3kms a day. The coy has also received numerous expressions of interest from parties interested in taking an equity position in the pipeline. It is not the intention to tap equity markets for funding. On the coys estimates the ROE for the Queensland project is 50%



'In addition to buying 3rd party stranded gas, EWC owns what could in time prove to be pretty significant reserves in the Cooper Basin. Some very preliminary studies at its Eromanga Gas field have indicated a range of 19.6 tcf to 96 tcf. Further testing is currently underway.

Valuation

RBS are currently in the process of re-initiating coverage. Worth noting that analysts valuation from last June for the gas and LNG facility in Indonesia is $1.30 (assuming $7.3 unit gas price and 2mtpa for 5years out of Indonesia), this increases to $1.98 for 2mtpa for 10years; $3.93 for 5mtpa for 10years