gulf lng project

Below is the text (published in the PNG Industry News earlier today) re: a possible announcement concerning Interoil's (and EWC's) Gulf LNG project.

Gulf LNG announcement looms: source

Blair Price
Wednesday, 19 September 2012
INTEROIL is gearing up for an important announcement this Thursday according to an industry source. PNGIndustryNews.net receives contrasting views from the source and from InterOil chief financial officer Collin Visaggio.

The source is well connected in Papua New Guinea and has provided some concrete leads before.

Most recently it resulted in our story on Friday in which Visaggio confirmed that more than one supermajor was involved in the bidding process for an operating stake of the Gulf LNG project and its Elk-Antelope field in PNG.

Yesterday the source told PNGIndustryNews.net that InterOil was attempting to sell half of the project to the PNG government at what it deemed to be a “commercial price”.

He then expects the government to try and market the stake, especially to get its share of development costs carried by another party.

The source further expects the deal with the government to be on similar terms as InterOil’s complex joint venture agreement with Pacific Rubiales Energy – the Colombian oil producer which agreed to buy a 10% stake of InterOil’s licence that hosts its Triceratops discovery for up to $US345 million.

“They are gearing up for some big announcement on Thursday which they will clearly try to dress up and say that the state will buy the gas at the same terms PRE paid, which the state may well try and hawk around for a carry on those terms but it will never get it,” the source said.

He also believed InterOil was most concerned about carrying out the modular LNG plans to monetise half of the EA field resources through Energy World Corporation.

He even said InterOil struck a deal to sell this modular LNG project to China National Offshore Oil Company three years ago.

InterOil responds

Visaggio is legally restricted on what he can say but told PNGIndustryNews.net that InterOil aimed to sell 25% of the Gulf LNG project as its optimal target for an operating stake.

“We always said we would sell more if it was hugely accretive to shareholders,” Visaggio said.

Based on a deal that a 25% stake is sold to a new partner, Visaggio said InterOil would have 40%, its long-time partner Liquid Niugini Gas would own 12.5% while the PNG government and landowners would collectively own 22.5%.

While his comments are at odds with what the source said, Visaggio could not comment on what was raised about CNOOC for legal reasons.

It should be noted that Prime Minister Peter O’Neill has recently returned from a trip to China.

In regards to the resources on offer, the source claims that five significant players have calculated estimates that vary from 4.8 to 5.5 trillion cubic feet of gas.

Visaggio said the certified resources were 9.4Tcf equivalent.