where did the $20m go?, page-9

Gents,

Yes $10m was bandied about initially,with the hope of a second hand plant,then some proper? costings were done,enough to get ALCOA and ERM and WHARF to agree as JV partners to go down the new plant avenue and for ALCOA to agree to front $25m in 2011 on those costings,not 2013 when finally built.
Exchange rates have shifted during construction as well as the cost of everything in a booming oil/gas market ex US source.Let alone Australian labour costs.

Some times e.g.proving old pressure vessels are up to SPEC,is more expensive than buying NEW built to SPEC,let alone getting Authorities to agree your testing is adequate after you've proved it to your own satisfaction.Then there is the upgrading of safety systems and etc on old plant.
Every weld would need X-raying to prove no cracks,need i go on.
No-one including authorities will take a risk and certify a bomb close to Perth if you get my drift and that will make it rather hard for any NEW player to start using old gear.
If they were SHELL for example,there wouldn't be a problem.
Their extensive industry experience would count.

So now everyone IS shocked that there was a 50% OVER RUN.
Well I wasn't happy,but not overly surprised.

The original $5m for commissioning was a JOKE.
Normal for a 50% over-run contingency on construction budget of new plant to see it fully operational.

Such is life.

However,Adding to an existing plant or growing/modifying it incrementally is far cheaper than its initial first build,with far less compliance oversight.

DYOR+DYODD Time to move on and pump gas and especially condensate flowing at ever higher rates to get the profits rolling in.