All,One cannot escape the recent subdued press reporting on the...

All,

One cannot escape the recent subdued press reporting on the worsening outlook for LNG - a glut of projects; its a buyers market, high market valuations, timing delays capex blowouts, NPVs under pressure, potential equity raisings with debt funding difficult to achieve etc etc. Just this morning an article suggested that the Santos Gladstone project timetable is growing increasingly tight and that too many projects are planned for Australia. One must also be aware that many of the slated projects are yet to reach Final Investment Decision with 7 in Australia due mid this year and project attrition, delay and even outright cancellation are inevitable.

This leads me to think about the Bradbury Effect with EWCs non conventional approach to low cost, mid scale LNG development which has put them years ahead of the other players. EWC have already ticked all the boxes they have the gas, they have the equipment, they have the funding, they have the management, they have the MOUs (Ok they are only MOUs but it's dialogue) and they have the project investors waiting in the wings. They also have the cash at bank and long term contracted cash flow.

EWC will do The Bradbury when the other projects feel the effects of attrition, delay and even outright cancellation. As a low cost operator they may well hit the sweet spot in the cycle!

Regards

Pihrana