just speculating

Make sure you take this with a grain of salt. I'm an optimist and bullish about CSG in Queensland and NSW.

The CSG industry in Queensland is powering on and LNG will be exported from Queensland. It can't be stopped now with State and Federal government support. Environmental concerns will only help to ensure the industry focuses on health and safety all the way.

I am certain there will be mishaps and news beat-ups regardless of how hard the industry tries to prevent accidents and problems. Let hope there will be very few.

Now to BOW.

I'm assuming here that BOW achieves commercial flow rates.

As a layman it appears to me that the technology to extract gas from coal is developing by the day and BOW will adapt that technology to extract commercial results from its fields. The nearology looks good with some fields surrounded by other Queensland producers.

I'm drawing from some great posts this week and here's the speculation.

BOW's talks with LNG Limited broke down some time ago.

BOW wants to stay independent and not sign a GSA with the upstart LNG Ltd. BOW wants to extract the best value for its gas when demand pressure builds from the Curtis Island projects.

LNG Ltd is now in cahoots with the CNPC subsidiary taking 19.9% and its appears an equal say in the company's management. I'm just going to call the CNPC sub "H" from hereon.

H clearly is interested in the OSMR technology and has the opportunity to participate in a near to start pilot project.

CNPC is the real player here as parent of H and tiny Petrochina.

Australia is a bit sensitive to the Chinese buying everything so Petrochina teamed up with Shell and acquired Arrow. Petrochina gets LNG supply, Shell expertise, Shell marketing and profit from the Arrow JV.

Shell and Petrochina are obviously interested in BOW, an Arrow off-shoot, but know they need to tread carefully.

Does it make sense for LNG Ltd to launch a takeover for BOW?

Well, yes it would be great for LNG Ltd and H, but how is LNG Ltd going to fund it? H would have to kick in the cash and takeover LNG Ltd in the process. FIRB approval would be an issue as well if LNG Ltd is more than 50% held by H.

Further, I don't think LNG Ltd is interested in taking on the upstream development. They'll have enough trouble building Fisherman's Landing and keeping capital cost under control.

So how do they do this?

First of all, LNG Ltd must have or will be planning to go back and discuss a GSA with BOW. If re-buffed as expected, there's three possibilities as I see it.

Arrow signs a GSA with BOW
Arrow takes over BOW
BOW is left alone to develop its fields

The thing to keep in mind is that Arrow, LNG Ltd and H will probably be working concert. Behind the scenes though.

Arrow has tenements in the Clarence Moreton basin, LNG Ltd holds shares in MEL with CM tenements. LNG Ltd hold 5% of MEL.

I'm speculating it will happen like this.

Arrow acquires BOW, assuming they don't enter a GSA. BOW's gas will be earmarked for Fishermans Landing (FLLNG) and supply to Arrow's Curtis Island.

LNG Ltd enters a GSA with Arrow, taking supply as Arrow fields ramp up given that BOW and MEL are further away from producing.

LNG Ltd enters a GSA with MEL for supply to FLLNG. Arrow develops its interests in the CM basin and shares infrastructure including the Lions Way pipeline with MEL. Eventually, MEL supplies both FLLNG and Arrow into Curtis Island. I leave any further speculation regarding MEL for a similar post on the MEL forum.

Arrow's supply to FLLNG reduces as supply is replaced by MEL. Meanwhile BOW ramps up for supply to Arrow and FLLNG.

Arrow (Shell/Petrochina) now has supply from several fields in Queensland and NSW.

Any and all alternative speculation is welcome.