go to santos ffn preso on hotcopper, page-37

Good post Psi,

There are lots of Black Swan events out there. But if you can foresee something happening (like last-minute QLD LNG consolidation), then it isn't a 'Black Swan event' - it is foreseeable.

Is it too late for consolidation in QLD amongst the major projects? Maybe, maybe not. But even if there is some cooperation/consolidation of the front end, that does not take away the competitive tensions to get economies of scale at the back end. All the majors want more gas. Everyone sees the benefits of cooperation/consolidation, but everyone also wants to be the top dog, the biggest dog, the operator.

But what makes ESG holders very comfortable is ESG have so many options:

- selldown LNGN to the Japanese and supply LNGN at wholesale-to-LNG prices
- ESG act as the middleman using LNGN, and LNGN gets bigger by buying gas from smaller resources in NSW (like as psi says, Santos in Gunnedah).
- sell gas into one of the QLD projects (GLNG or others).
- enter into gas swaps with Santos or ORG, so that Narrabri takes over existing southern gas commitments, but at wholesale-to-LNG prices.
- sell gas into the domestic and power-gen markets
- Or auction themselves to the highest bidder.

Many of us are giving up trying to guess exactly what will transpire. Without inside information, it is almost impossible to guess. And the reason it is so hard to guess is that there are just so many potential uses and buyers for ESG or ESG's gas. I don't claim to know what will happen.

The one thing I do know is, ESG gas will get used in LNG in some form; that ESG is closing in on a large reserves upgrade; and ESG is closing in on having to make decision about where the gas goes.

So, in the end, does it really matter WHY the ESG share price will rise strongly? Not really, just that it WILL.

Yaq