Saturday, April 19, 2008

ConocoPhillips VP Speaks On Gas Value

Will Hussey, ConocoPhillips senior vice president for origination see the floor price of natural gas equal to $7/MMBTU.

In rough terms this indicates that ConocoPhillips values the 4,500,000,000 SCFD of Alaska natual gas at $11,340,000,000/year.

Assuming 1,200 SCF gas / barrel of tar sands produced the price of gas adds $8.40/barrel of $115 tar sand oil, or about 7%.

These figures give some context to the value and rate of return for the Denali Pipeline. The value of the gas looks like it will offset the cost of building the pipeline.

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