[Stingray2004]

Just an interesting note on Australian LNG facilities - on the one hand ya have the western Australian LNG projects (northwest shelf), which are all based upon offshore natural gas deposits.

OTOH, ya have 3 Aussie LNG terminals that will (or have) come on-stream in eastern Australia (Gladstone region). And these three facilities all utilize coal seam gas (coal bed methane), which is of a much lower quality than typically sourced natural gas.

To put that into context, Asian natural gas requirements are "richer" than that of North American utilities, for example. Ergo, Asian utilities also require that LPG is injected into imported LNG in order to upgrade same.

On that same note, since these 3 Gladstone region LNG facilities utilize CBM as their source... opex is much more expensive. IOW, once a CBM well is drilled it begins to deplete immediately and requires additional CBM wells to be drilled to replace same in short order, which increases opex.

BTW, shipping time from NE BC to Tokyo Harbour, for example, is similar from that of the Aussie Gladstone region.

With that background outta the way... both Origin and ConocoPhillips have a combined 75% interest in APLNG. China's Sinopec (with a 25% interest) is the only off-take partner.

Both Origin and CP have entered into off-take agreements with their 75% interest based upon JCC-linked prices. And that's where same becomes interesting based upon $U.S per barrel:

1. $U.S 25/barrel - covers all operating and continuing capex on steady basis;

2. $U.S. 30/barrel - able to pay interest on financing;

3. $U.S. 40/barrel - not only pays interest charges but can amortize dabt on an accelerated basis;

4. Above $U.S. 42/barrel - profit begins to kick in above and beyond operating and financing costs;

From Origin's CEO Grant King himself.

And the foregoing is based upon the recently completed APLNG - with Aussie capex per installed million ton/per annum capacity is the highest on the planet.

And that's in today's flooded LNG environment with markets expected to balance out by 2020/2021 - when LNG facilities in BC are expected to first come on-line.

Just some context.