oh dear

http://www.brisbanetimes.com.au/business/master-of-illusions-vanishing-act-20120330-1w3f6.html

piss poor peice of journalism but certainty taps into the niggles most ewc investors have. Bronte capital wrote a almost identical piece two or three years ago.

Mr West could have checked with Chart, Standard Chartered, Mitsui, Siemens, BP Migas,

As I understand it - and after making comparisions to other lng plants the main reasons for the cost differences are:

1. generators (ewc will use sengkang. 1 tonne LNG needs about 35mw so about $35m per tonne)
2. lng ships (ewc have outsourced to teekay)
3. upstream field development (woodside, oilserch, snovit etc, all include field devlopment as part of the costs - at $2 per mmbtu finding and development costs (scale as you like), 50 mmbtu per tonne LNG, 1m tonne of lng costs $100m in finding costs per year. Twenty years is $2b).
4. then there is financing costs for the construcution period to first cashflow - about 20% - 30% of the total project
5. all the other stuff - pipelines, topsides jetties etc

There may be some double counting here - but it is pretty easy to add it all up and get close to $2.5b-$3b per annual tonne. But obviously that is not the business model. The business is to go modular, take standed gas, or gas that someone else is paying to develop.

Hopefully EWC will come back with a good repost - but I wouldnt bet on it. But despite initially asking the right question (wheres the plant?), this Michael West seems too pleased with his openning reparte to actually do the work that needs to be done to understand the comparisons he is making.

Now if only EWC could answer the questions: Where are the cold boxes? and When will they be on site?