the final stages

Just been talking through and discussing a couple of things about the frustrating route the EWC LNG project has taken us.

Boring background, EWC has already secured approval from BKPM, Indonesian Investment Coordinating Board, and the Minister of Energy to build the LNG plant. The current significance of these will be judged very shortly.

They do not yet have approval in the form of their POD from BP Migas.

There are various sticking points here. BP Migas 'thinks' EWC does not have enough reserves to build the plant. EWC have had international and local certification but again do not have BP Migas's approval.

EWC is confident of submitting new data to support 2-4tcf of gas. This quantity is sufficient to give the LNG plant supply for 15 years.

One day BP Migas says EWC have not provided eneogh data in their POD and the next week they say they they have never even seen a POD from EWC. All comments off the record from a variety of BP Migas personalities via the Jakarta Post.

See a pattern ? BP Migas wants to be invited onto the dance floor in a timely and polite fashion. As it should be.

Maybe the route EWC have taken has rubbed a people within the ranks of BP Migas up the wrong way. There are suggestions from many different quarters there will be some important meetings this week between EWC and BP Migas. The aim wil be to resolve all outstanding issues, obtain POD approval and get the project on track.

Let's not forget he deal with Tokyo Gas is a company maker. It WILL go through. TG are renowned for having the very best international procurement team in the business. For TG to have made a seperate announcement of the HoA endorses their seriousness in their EWC partnership. This is a powerful partnership plus it gives Indonesia a solid supply of LNG.

The TG partnership is a company maker because it not only gives EWC a powerful financial and offtake partner in Sengkang but also an important partner intenationally and someone who financially supports the EWC modular LNG strategy.

The final piece. Indonesia is desperate for foreign investment and energy. Recent investments in Indonesia clearly indicate they want serious investments in the oil and gas sectors in particular. Not only for capital investment and employment reasons but for the supply of gas to a country desperate for energy for domestic use and industry.

It seems obvious EWC may have taken a route that has negated them getting their POD. Probably the goal posts have been moved several times. Possibly positional changes with the government ranks and BP Migas structure have all played against EWC.

Whatver the reasons and the route taken in the past it looks more likely than ever that EWC is in the final sessions of resolving all outstanding issues with BP Migas and whoever else higher up has sound reasons to want to get this project fast tracked.

The final stages.

Cheers,

Mont