The logic behind this move was very simple. China needs gas & its common knowledge that the Japanese are the regular buyers frm WA & NT's two producing LNG projects, i.e, NWS JV & Conoco's plant at Bayu-Undan. (Note that all the deals we hear about, frm WPL's Browse basin, Exxon PNG & Gladstone are all future LNG deals).
So while the Chevron & Co were busy selling the gas frm Gorgon & a small stake to the Japanese, IMHO, Petrochina have taken the best seat in the house by sneaking in thro' the back-door i.e CUE.
It's easy to get a foot in the door (or walk away with the door) esp. when u r dealing with a junior explorer in need of cash to develop a project in the North West Shelf.
Like every exploration project their are risks (drilling/development/budget), but there's also imminent pay-off, should the first well prove HC's in the area.
Keeping it very simple, 12 tcf of recoverable gas equates to 240 mil. tons of LNG & MEO should get 2.4 tcf or 48Mt's of it (assuming its all there post-drilling)plus the 140 mmbbls of recoverable condensate. So lets hope firstup, that the deal is as good as the prospect.
2morrow is another day.
MEO Price at posting:
37.0¢ Sentiment: Hold Disclosure: Held
