Gas Monetization worth ZERO??? trading below cash at the moment, the market is not giving any value to HRT's assets
Is natural Gas in Brazil worth ZERO??
not long to go & there is some money to be made with HRT's Gas
The average tariff for the gas industry in Brazil is $ 17,14 per million BTU (international reference measure for the marketing of the product), while in the United States the value is $ 4.45 per million BTU.
https://www.costdrivers.com.br/costdrivers/noticias/2013/5/cost-of-gas-makes-the-industry-lose-4-9-billion-per-year-says-firjan-141640/
Possible production 7 mio m³/day, = 254.122.964.900 BTU
* $ 17,14 per million BTU = 4.355.667,62 /day * 0.55 (HRT interest) =
$ 2.395.617,19/day net to HRT
HRT will need the help by third parties to bring their natural gas into production, I assume they will farmout some stake to Petrobras about 20-30%
$ 1.088.916,90- $ 1.524.483,67/day net to HRT with 25-35% after possible farmdown
Now that leaves us with the question, what are the costs? I believe to remember Marcio saying about $8/mioBTU or $9/mioBTU for subsalt gas:
Brazil's subsalt natural gas could be as expensive to produce as $9/MMBtu when it starts flowing in sizeable quantities
https://www.platts.com/RSSFeedDetailedNews/RSSFeed/NaturalGas/6229386
While $9/MMBtu is a high production price, Brazil has at times recently paid double that for imported gas. The country went through a severe drought late last year that cut into hydropower output, which normally provides more than 80% of the country's power. To fuel gas-fired power generators, Brazil has paid as much as $18/MMBtu for gas imported as LNG, a price level needed in order to compete with demand from Japan, according to market sources.
if we assume costs of about $8/mioBTU
$ 580.670,97- $ 812.939,37/day net to HRT nach FarmDown von 20-30% & $8/mioBTU costs,
here is the lastest update on progress:
GAS MONETIZATION – DELIVERABLES & TIMELINE
Work Plan and Status
1. PROJECT MANAGEMENT:?
Final monetization report & recommendations to Steering Committee - Done
2. SUBSURFACE GROUP:?
Resources and Production Profile Report - Done
3. ENGINEERING:
Options Screening and Basis of Design - Done? HAZID/ENVID study
Cost Estimates Completed - Done?
Final report – July 2013
4. MARKET:?
Draft Reports on Regulatory Regime and Markets - Done
Draft Conclusions on Monetization Options
Delivery of final report & executive summary
5. ECONOMICS:?
Draft economics model with all inputs ready
Final model
UPSTREAM:
Subsurface resource capacity already established with base case 5 MM m3/d and high case of 7 MM m3/d;
Engineering studies and cost estimates concluded for Gathering system;
Production facilities and export pipeline;
DOWNSTREAM:
Visit to units of Celanese, Ventech and Velocys in USA;
Cost estimation for GTL, LNG and Power Generation;
MARKETING:?
Draft Reports issued and workshop held with Petrobras and TNK-BP;
ECONOMICS:?
Economic model construction underway.
Natural Gas worth ZERO in Brazil?
don't think so
GLA