So, there is a business case for loading LNG in Louisiana, shipping it across the Atlantic, through the Mediterranean, down the Suez Canal, past the Houthis and around Asia to Japan, but the Canadian ex-Prime Minister assured us there was no business case to build infrastructure so we could load LNG in Quebec and ship it across the Atlantic to Germany.
Al, I am not privy to Chevron's internal plans, but I guess that their Haynesville assets are no longer economic and are designated as "non-core assets." All majors and large independents go through this kind of consolidation process. The structure of the deal—$75 million in cash and a $450 million capital carry—allowed Chevron to extract significant value while minimizing immediate capital expenditure. Chevron retains a 30% non-operated working interest and an overriding royalty interest, so they still have a financial interest in the Haynesville without being the operator. Good question, Al. Ed
Does this mean Chenier will likely gain from this trend?
Yes. Chenier makes money on throughput, so it doesn't matter who owns the natural gas reserves.
So, there is a business case for loading LNG in Louisiana, shipping it across the Atlantic, through the Mediterranean, down the Suez Canal, past the Houthis and around Asia to Japan, but the Canadian ex-Prime Minister assured us there was no business case to build infrastructure so we could load LNG in Quebec and ship it across the Atlantic to Germany.
Why would chevron sell? surely they don't need the cash, so I'm wondering what they're gaining.
What's your take?
Al, I am not privy to Chevron's internal plans, but I guess that their Haynesville assets are no longer economic and are designated as "non-core assets." All majors and large independents go through this kind of consolidation process. The structure of the deal—$75 million in cash and a $450 million capital carry—allowed Chevron to extract significant value while minimizing immediate capital expenditure. Chevron retains a 30% non-operated working interest and an overriding royalty interest, so they still have a financial interest in the Haynesville without being the operator. Good question, Al. Ed