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Msg  8004 of 13357  at  6/21/2011 7:44:08 PM  by


Annual meeting #2


When IOC started they had a $10 million market cap.  They were told they could never get that refinery built and running.  Today their market cap is $2.5 billion and are still being told they can’t succeed.

FID?  Henry Aldorf after the meeting was very clear about that.  He said the FID date is meaningless.  What is important is the date of first gas, and both he and Phil reiterated several times they are focused on protecting the first gas milestone in 2014.  That is precisely the reason why the BOD authorized the $100 million to purchase the pipeline yesterdat, to keep the project moving toward the important milestone.

Re FID, Phil did state “only an act of God will keep us from getting to FID”.

Henry suggested (by the way he had no part in the presentation, these were subsequent comments made in group conversation) that IOC was reinventing how LNG plants were to be built.  The financing deals with Misusui and EWC and Flex/Samsung were groundbreaking in the preservation of IOC’s capital and resource.  Early infrastructure was being built by IOC to reduce risk for subsequent contractors thus saving a great deal of time and money.  Phil mentioned they were getting a large number of skilled, experienced hard working Phillipinos from countries like Eqypt where they’ve been displaced by the political upheaval.

Henry had built Marathon’s ENG plant at $324/mmt.  COP was building at $1,940/mmt.  XON at $2,270.  Woodside at $3,400.  IOC?  $450 is projected.  Henry doesn’t think he can beat the Marathon number, but insists he intends to best that construction duration. 

Takeoff agreements.  Phil says a 2 MMTPY is close, but believes for reasons he stated (e.g. Korea is already looking at shortages, China’s hydropower is suffering from drought) the market “sweet spot” will be going into the winter of 2013.  As many of us on this board have observed,  why be in a hurry to  sell at bargain basement when spot is $13.50, longer term contracts are $15-17 ?  Phil stated he’s been at the “Blue House” in Korea, comparable to our White House.  The Koreans are competitive people.   Samsung is 20+% of their economy.  Samsung wants to float that boat.  More to the point, Phil said Samsung asked them if IOC was worried about offtake agreements.  Samsung said they’re not.  They’ve got lots of people who use NG  Makes a lot of sense.

Storm coming in.  Gotta go.  More later.

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Msg # Subject Author Recs Date Posted
8005 Re: Annual meeting #2 us2u001 1 6/21/2011 8:00:54 PM

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