lng project in png

Well, here we have it: a LNG project in PNG which some hc posters claimed only recently will never come to fruition. On top of it, EWC will not only build an LNG facility but also a 150MW power station which will provide the necessary electricity for the 2-3mtpa LNG plant.

This deal was signed, in the presence of PNG?s Prime Minister, in New York and is tremendously significant for all key stakeholders. As far as EWC is concerned, this project, foreshadowed first in its 2009 Annual Report and pursued vigorously by management, will expedite EWC?s business plan achievements, namely of becoming a leader in modular LNG development and a significant supplier of natural gas to Asian markets.

Calculation of costs, as mentioned on hc, of approx. US$900, appears to based on the recent ASX announcement, and a revenue of only US$90million may be based on a Henry Hub price of US$6/mmBtu. As far as the US$900million are concerned, it needs to be kept in mind, that this cost refers to the LNG facility as well as the 150MW power station. The assumption of the 14.5% proceeds from the sale of LNG equating to US$90million assumes that the JCC price is the same as the Henry Hub price and that this is price the LNG will be sold for. In addition, no allowance is made for the profit the 150MW power station will make by selling electricity to the LNG plant. Furthermore, this development (and its expansion to 3mtpa by 2014/15) may also provide some opportunities for EWC?s LNG Hub in the Philippines, estimated to become operational in 2012.

Overall, as shareholders in EWC, it may be worthwhile to remember that, whatever comments may be posted on hc, Stewart Eliott and his crew, are focused on maximising the financial benefits for EWC and its long term future prospects.