<Nobody builds LNG facilities without long term contracts with buyers.>
So, we need to see those contracts, before we can make any guess about IOC's profitability, and have any degree of certainty. My point is, there is a non-trivial risk most of IOC's gas stays in the ground. China and India could get all the LNG they need from the U.S. (including Alaska) and Australia. China and India and Japan could get all the gas they need without any LNG, if enough pipelines are built from Russia, Uzbekistan, Iran, etc.
If I were in charge of ensuring domestic energy supplies for China, I would (in this order):
1. steal fracking technology (why pay for technology you can steal with impunity?)
2. aggressively develop domestic resources
3. finance gas pipelines from every possible source, preferably multiple independent lines.
4. delay any LT contracts for LNG, to see if the above steps satisfy demand
5. sign LT contracts for LNG
6. sign those contracts for supply from politically stable sources, even if that means higher prices, because reliability of supply is at least as important as price.
7. as a last resort, get LNG from places like PNG and Angola. |
