Japan's $66 billion Demand For WA Gas

Discussion in 'Markets & Economies' started by Holdfast, Sep 23, 2014.

  1. AngloSaxon

    AngloSaxon Active Member

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    The greens are anti-human and want the wheels of every industry to stop. A friend of mine who lives in north-west Tasmania, working in both government and private industry, the stories she had to tell. Basically they stood in the way of every project proposed by everyone.

    And back on topic: It is a great time to be a Woodside Petroleum shareholder.

    The doom and gloom in comments above about imagined resource depletion: The North-West Shelf resources will last hundreds of years.
     
  2. SpacePete

    SpacePete Well-Known Member Silver Stacker

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    The doom and gloom is from the Deloitte analysis of manufacturing industry impact related to rising prices, not depletion.

    The rate of depletion, project lifetime and extraction costs can't be ignored, and are factored into the share price by investors.

    I found some info on a couple of the fields:

    * The Gorgon and Jansz-Io gas fields, 200 kilometres (120 mi) from the coast are said to contain 35.3 trillion cubic feet (1,000109 m3) of natural gas and may have a lifespan of 60 years.

    * The Prelude and Concerto fields will produce 3.5 million tonnes per annum of LNG as well as liquid petroleum gas (LPG) and condensate for at least the next 25 years.

    The projected lifetime of 60 years could be extended if later price increase and improved technology make it viable.

    It is likely that new fields will also be discovered, although not necessarily as big or as easily exploitable, at least given today's technology.
     
  3. SovereignBuyerMelbourne

    SovereignBuyerMelbourne Member

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    Ultimately yes, were does it end? I could go on but as you have said I should respect the topic.

    This is great news for Australia and will hopefully provide growth now that Gold, iron and oil is low and coal isn't cool.
     
  4. SpacePete

    SpacePete Well-Known Member Silver Stacker

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    If you like epic scale machinery, then watch the video below, seriously, it is amazing:

     
  5. SovereignBuyerMelbourne

    SovereignBuyerMelbourne Member

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    Wow, so if I understand correctly this thing can move to one location drill for 25 years then when thats used up this thing can move to another location and continue drilling?

    That's pretty impressive.
     
  6. SpacePete

    SpacePete Well-Known Member Silver Stacker

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    Even the Lego model they made of it is impressive: https://www.flickr.com/photos/ryanmcnaught/13712238844/

    Also... a size comparison:

    [​IMG]
     
  7. bja

    bja Member Silver Stacker

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    And not good for australia, no contruction jobs, limited operational jobs and also reduced royalties.
     
  8. SovereignBuyerMelbourne

    SovereignBuyerMelbourne Member

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  9. SovereignBuyerMelbourne

    SovereignBuyerMelbourne Member

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    Shells entire you tube account is pretty interesting.

    [youtube]http://www.youtube.com/watch?v=yFr-OocOb7Y[/youtube]

    [youtube]http://www.youtube.com/watch?v=xhCEDKAtrgM[/youtube]

    is it feasible that bio fuels from sugarcane could become the next widely used energy source?

    Also interestingly I just found out that Australia produces quite a lot of ethanol, and its domestic production is tax free until June 2021.
     
  10. Sandgroper

    Sandgroper New Member

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    I have yet to see any mention of the fact that gorgon l.n.g. gas is toxic and will be cleaned using unproven technology (pumping the poison underground and hope it stays put) if this huge risk works we've lots more dirty gas in west australia .cheers
     
  11. bja

    bja Member Silver Stacker

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    I think you will find that the only thing pumped underground will be the CO2 (termed an acid gas is this where you get toxic from?) which is removed from all LNG (methane) as part of the refining process. The real 'toxic' bits are the mercury and H2S which are also removed and then sent onshore for collection and sale.
     
  12. CriticalSilver

    CriticalSilver New Member Silver Stacker

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    Yes that's good in theory, but what about newly created money that is not related to the fruits of any labour other than the strokes of a keyboard to create insane amounts of credit by the BOJ?

    It's the same with allowing any nation whose affluence is rooted in credit credit creation access to the resources of another who is not as profligate in their credit creation. Ideas of efficiently trading the fruits of labour are better replaced with ideas of exporting inflation in such circumstances, aren't they?
     
  13. Naphthalene Man

    Naphthalene Man Active Member Silver Stacker

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    I can't see how it wouldn't push local prices up.
     
  14. bordsilver

    bordsilver Well-Known Member Silver Stacker

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    This doesn't change the seller's sovereign right to trade their property freely - including with offshore buyers who may or may not be paying with BoJ credit. The fraud perpetuated by the BoJ on existing holders of JPY (or by the US Fed on existing holders of USD) is a separate consideration to the selling of gas to whoever the seller deems to offer them the best value for their product. Besides being ethical, the latter also happens to result in scarce resources being allocated more efficiently over time than other options.
     
  15. bordsilver

    bordsilver Well-Known Member Silver Stacker

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    Actually, it should result in higher PRRT payments as it reduces the CAPEX cost substantially. (There's also more operations jobs compared to a land-based facility, but these are always only a small portion of the capital-intensive projects such as this.)
     
  16. bja

    bja Member Silver Stacker

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    The money is not in the 200 operational jobs but rather the 6000 construction jobs and the logistical support that such an organisation requires.
     
  17. petey

    petey Active Member Silver Stacker

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    I thought Fukushima was meant to be sorted out by then? :lol:
     
  18. CriticalSilver

    CriticalSilver New Member Silver Stacker

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    That's right, it doesn't change the right of anyone to sell anything they like, but the question is, how ethical is it if the trade of my neighbour imports the inflation of a foreign nation that dilutes the value of my savings?

    As far as I can see, it is effectively the same as being personally attacked by the actions of a foreign power who has used my neighbour as an accomplice.

    In the case of the BOJ, if directed into the foreign trade of importing resources, the inflation of their money supply directly inflates the AUD and through the forex process, indirectly the USD.
     
  19. bordsilver

    bordsilver Well-Known Member Silver Stacker

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    Yes and no. Yes, the old stick build construction method requires a lot more Australian content and labour compared to the newer FLNG, GBS or pre-assembled modules that are increasingly being used. In many respects the newer build techniques were a reaction to the high labour costs endured by the companies during the boom. Some, especially the FLNG, fundamentally allows uneconomic resources to be developed.

    Broadly however, the CAPEX phase doesn't really add much to Australia's real GDP as it is basically an alternative form of consumption. We principally benefit from the higher terms of trade due to the need for the developers to bid up wages to get the few thousand people on-site in regions that people generally don't want to live. But these higher paying jobs crowd out other economic activity. The operations phase is where the real benefit from these projects occurs as the per worker output jumps considerably and gives a terms of trade kick as well.

    In basic terms:
    1. Paying 6,000 construction workers an extra, say, $50,000 a year in wages for 5 years provides $300 million a year benefit for 5 years.
    2. Conservatively, let's say that 200-300 operations workers are producing 4mtpa @ $500/tonne. That's $2,000 million a year in revenue excluding any condensate revenue. Operations costs are probably around 10-15% of revenue so that's somewhere around $1,700+ million gross profit. Allowing for depreciation allowances etc even a low net 20% company tax equates to $340 million a year to the Commonwealth Government for 20-30 years. PRRT would probably easily add another 50% in revenue to say a conservative $500 million a year benefit. This is far higher than the construction benefit without accounting for the crowding out effects of taking 5,700 workers away from other activities.

    Capital deepening is beneficial when it is operating.
     
  20. bordsilver

    bordsilver Well-Known Member Silver Stacker

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    But you can't import inflation. By definition Japan/USA etc are devaluing their currency relative to Australia's. They are creating inflation within their own currency and improving our purchasing power.
     

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