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As does $25 a share!
SakartveloChan -
Probably off the cuff seeing as he needs Mexico to give him the green light (on probably several projects) before its even possible. Also, that could include other projects we just don't know about. Some in the industry say he has projects lined up in Mexico that will take five years to realize. Based off the projects we know about, we are finished in two years. Also, if the Brasil Storage Facility and the mysterious "Fourth Project" have revenues on par with what we suspect for the San Fernando Pipeline & Isthmus to have, then we are looking at a $11 stock. A far ways off from $25-$30! Could it be there are other mega-projects that will take up to 5 years to complete?! Remember the Trans-Oceanic pipeline article from last week? It reads that Mirage has SIX MEGA PROJECTS. oh my oh my.
https://www.eleconomista.com.mx/amp/opinion/Gasoducto-Interoceanico-20200816-0067.html
Mid - October for the Concho Line. We'll find out about the others once Mirage can open up to talk about it.
Stinksniffer, I personally don’t think so.
When AMLO said on Monday 8/17 that the Economic Recovery Plan would be presented in 15 days; that technically puts us at September 1st, but we know Mexico doesn’t do anything on time.
AMLO saying “in 15 days” seems to the American equivalent of “sometime during the week after next.”
So, here we are 9 days later. Hopefully next week!
This means worst case scenario (P/E ratio of 10) on only half of our projects, the PPS is $5.46.
So, where does Ward get his potential PPS target of $25 - $30?
Clearly, the P/E ratio must be higher than the worst case scenario of 10 and/or the other two projects are revenue powerhouses.
Once construction has started on all projects, look out for the buy out. I'm sure offers start coming in very quickly as soon as AMLO open's his mouth this coming week (subject to delay as always with MX).
Word is already spreading in the industry about the Concho Line.... which is really cool... just a matter of time.
Great post, Macod!
If these projections are the case, it would be enough! However, I believe $400m net income across all projects is too low. Based off what we know, we just about hit $400m net income on only half of our projects.
Ward said in the Mexico Business interview that on all projects, Mirage will split the revenues with the Mexican government 50/50. https://mexicobusiness.news/energy/news/ready-move-crucial-natural-gas-infrastructure-projects
_______________________________________________________________________
Isthmus
The Isthmus PR shows that once Phase 1 and 2 are completed, the net income to the C||T (Trans-Oceanic Corridor/Mexican Government) for their half will be $1.485B annually. The annual net income breakdown will then look like this:
Mexico's half: $1,485,000,000
Our Partnership's half: $1,485,000,000
- 75% to BlueBell: $1,113,750,000
- 12.5% to Northern Hemisphere Logistics: $185,625,000
- 12.5% to Mirage Energy: $185,625,000
$185,625,000 Annual Net Income to Mirage Energy
_______________________________________________________________
San Fernando Cactus Line
- Capacity for 3.5 - 4 bcf/ d
- Only known contract to shareholders at this point is the 1/2 bcf/ d to Puebla
- Estimate transportation fee: $1.25/ per thousandth
4 bcf / d @ estimated $1.25/per thousandth = $1,825,000,000 annual revenue. Rough estimate of 20% overhead ($365m) lands us at $1,460,000,000 in annual net income. The annual net income breakdown will then look like this:
Mexico's half: $732,500,000
Our partnership's half: $732,500,000
- 75% to BlueBell: $549,375,000
- 25% to Mirage Energy: $183,125,000
$183,125,000 Annual Net Income to Mirage Energy
________________________________________________________________
Brasil Storage Facility
Intake fees: ?
Storage fees: ?
$???,???,??? Annual Net Income to Mirage Energy
_________________________________________________________________
The Fourth Project
$???,???,??? Annual Net Income to Mirage Energy
______________________________________________
Mirage estimated Net Income on only two projects: $368,750,000
Now that’s what I call house money!!!
I agree with your timeline, Enlighten!
I’m all eyes, Ibow!
Macod,
I believe you’re correct in that decreased demand due to COVID had likely set back phase 2.. along with our other projects. Luckily, demand has recovered much faster than anyone anticipated.
As it looks in the isthmus PR, it seems to suggest that the phase 2 oil lines will be in service 18-24 months after phase 1 is completed. So to me, that reads that Mirage will not even start phase 2 until phase 1 is completed.. at the earliest. With this being much further out than phase 1, the negotiations are clearly not as far along as our other “done deals”. If this is so, then it is reasonable that financing is not yet ready to be secured.
$8B in Projects Breakdown:
The announced financing so far is $4B to cover:
1. Storage facility
2. San Fernando line
3. Phase one of Isthmus
The latest Isthmus PR showed the size of the Isthmus project reduced from $6B down to $2B with 50% participation as opposed to 30%.
This tells me the $4B in financing is allocated as such:
$1.2B for storage facility
$0.8B for the San Fernando
$2B for Isthmus phase one
$4B for Isthmus phase two (tentative- not financed yet to our knowledge)
= $8 Billion
The 42“ gas line wasn’t discussed anywhere else in Mirage PR’s.
It was mentioned in the map on the March PR. I had called Ward about it, and he clarified that they are indeed building that 42 inch expansion line.
Also Penny, I think it was supposed to be mentioned in the isthmus PR. Look at the isthmus PR for Phase 2. It reads “three 36” lines”. I think that info is incorrect. My thinking is phase 2 is a 42” gas line and two oil lines of which I do not know the size of. Thoughts?
Macod, I agree about the possibility of financing PR’s before Mexico announces...
afterall, they’ve done it before!
If there truly is an increase in the funding, or if they officially closed the deal; it’s reasonable we get the update in advance.
That would make for a fun week next week! Shooooommmmmmm
Correction: 15 days from August 17th*
I’m sleep deprived these days
44magnum,
Great question! Here’s my opinion, sorry it’s so lengthy. Just thought it would help those that are new here to understand the environment we are dealing with. I know you’ve been around for a while.
I think with AMLO saying on the 20th, that he will present the Economic Recovery Plan (which has a focus on the construction and energy sectors) within 15 days.. that doesn’t necessarily mean September 1st. He likely means “half a month or so”. Knowing Mexico, It will likely be longer than 15 days from August 20th, but hopefully it will still be the first week of September.
Back in early 2020, many of us on this board earnestly waited for this energy plan to be announced just about every day. We heard AMLO say he would present it “in 10 days” or in “two weeks” countless times.. the delays were because of differing opinions on the issue of oil farmouts, it held the entire plan up. Can you imagine how painful it was for us to wait? We alleviate by accumulating. Finally, we had a set date in March that AMLO confirmed. We were just two days away when he confirmed he would present it. The oil war happened and the Energy Plan Presentation was cancelled the night before! We’ve been in darkness regarding this plan ever since.. up until now.
The positive indicator for this fruition is that Mexico has shown themselves to be desperate for foreign private investment, even in the realm of oil farmouts. This article from two days ago confirms the fact: https://www.naturalgasintel.com/mexico-approves-slew-of-upstream-oil-natural-gas-work-programs/
Since oil farmouts appear to finally be a now non-issue (much to AMLO’s chagrin I might add), we can be confident that the barrier that caused our delays at the beginning of the year has now been removed. The pandemic clearly forced things into the proper perspective for Mexico. Not that our projects ever were threatened (as we are not an exploration company), but we were held up by the other dead weight controversial projects in the energy plan. The light is now green across the board. Let’s count on the first week of September for Mexico’s announcement.
Now, can we expect to have news before Mexico first takes the floor in September? My opinion is NO! Ward knows this is AMLO’s political feather in his cap. Especially his “pet project” the Isthmus!!!
Plus, it is best for shareholders (I think) that this begins in Mexico and echoes into American mainstream media. Mirage then releases PR’s with all eyes watching. September is set for a shaking!
Awesome Macod. That 220km gas line is the 42” line crossing the isthmus.
Here it is in Mirage’s PR from 3/18:
https://orders.newsfilecorp.com/files/6732/53565_4734b7d0340fe99b_002full.jpg
This is Mirage. It’s a 42” line to support the existing 12”. This pipeline is shown on the map in Mirage’s PR from 3/18/2020. Mirage revealed the size of it even before Mexico did!
Also, this is what the El Economista article earlier this week was confirming.. The “ “Gasoducto Interoceánico” is to be built by Mirage Energy.
That’s big business! How else does AMLO plan to create an LNG facility in the Port of Salina Cruz to ship to Asia? With the current gas supply and only an existing 12 inch line stretching the isthmus, it is impossible...
13 days until Christmas
Wonder why you need a truck.. hmm
The stink of tons of squid?
Thanks stinksniffer. I myself wouldn’t be here if it weren’t for namely Macod, Penny, and Tradingonrumors. Sever others have been very helpful as well.
Could this be when AMLO utters the name Mirage Energy? 15 days?
AMLO will present an economic reactivation plan in 15 days
Sarahi Uribe | The Sun of Mexico
During his message at the morning conference, President Andrés Manuel López Obrador affirmed that an economic reactivation plan for our country will be presented no later than 15 days.
He explained that this strategy will contemplate the creation of infrastructure to promote the construction and energy sectors.
The head of the Executive announced that this Reactivation Plan is being carried out in conjunction with business organizations.
"We are talking with businessmen, with the Business Coordinating Council and all business organizations, in 15 days an economic reactivation project will be presented," he said.
https://www.elsoldemexico.com.mx/mexico/politica/sigue-la-agenda-de-amlo-este-17-de-agosto-5634870.html
Good to see acknowledgement south of border!
"El Metropolitano de Veracruz" tweeting our story:
Nombran a Horacio Zárate representante de “Mirage Energy Corporation“ en #México
— El Metropolitano de Veracruz (@Metro_Noticias) August 16, 2020
La gigante energética “Mirage Energy Corporation“ invertirá 4 mil mdd con infraestructura en Transporte, comercialización y distribución de Gas Natural en Mexico…https://t.co/uN1rOj1tyj pic.twitter.com/o4DGgIFAl8
Jonsmile,
We know that the Concho line starts in October. So, my opinion is funds will move hands some time in the next 6 weeks.
Haha yes! Let us hear! You've no doubt have been a trooper and an asset to many of us.
Usually I slightly panic when you're not bullish.. I know you still are. Long time coming for you.
Lol Tradingonrumors.. Of your negative posts, this is my favorite. Hopefully this time around those ole words "enjoy the ride" will have new meaning.. JACK POT.
Good point. Never have I met someone more paranoid.
Also, the picture Horacio tweeted of him and Ward together very well may be an older pic.
To me, this sounds more like a new agreement and we’ll see a PR on it soon.
The first agreement with Horacio was “to obtain and file all necessary permits/assignments for the respective projects for each company.”
Now this “commercial and strategic alliance” will be “to promote projects from WAHA Texas to the interoceanic corridor, for the distribution of Natural Gas.”
That’s why he is being referred to as a “new representative of Mirage in Mexico.” He’ll be approaching commercial consumers for supply contracts.
That’s my take.
New article, translated from Spanish:
Cheapest Natural Gas in the world for Mexico
08/11/2020
Given the new opening of investment in Mexico, it is the ideal time to bet on the economic injection, and infrastructure
Mirage Energy Corporation, is one of the most important companies in the world , with great expertise in Clean Energies and Natural Gas , has made a commercial and strategic alliance with Horacio Zárate , president of the National Energy and Petrochemical Council , who will be the new representative of Mirage in Mexico .
Whose responsibility will be to promote projects from WAHA Texas to the interoceanic corridor, for the distribution of Natural Gas.
Horacio Zárate , agrees with the current Energy Policy of the government of Mexico , and has been a promoter of Natural Gas in the housing , commercial and Industrial areas in several states of the Republic in Mexico .
Given the new opening of investment in Mexico, it is the ideal time to bet on the economic injection, and infrastructure, creating favorable conditions for the development of Natural Gas, committing to substantial savings; by marketing, distributing and transporting the cheapest Natural Gas in the world in the country.
This new alliance between Ward and Zárate looks good for the strengthening and economic reactivity of the productive sector , which has been hard hit by the global pandemic .
https://heraldodemexico.com.mx/mer-k-2/gas-natural-nuevo-presidente-horacio-zarate-mirage-energy-corporation/
Yes!!!
Another observation from AMLO’s comments yesterday..
AMLO, in conjunction with praising Texas natural gas as the cheapest in the world, Mexico’s need for more natural gas infrastructure to transport gas throughout the country, reaching Quintana Roo (Yucatán peninsula) with gas, exporting it further south to Central America, and liquefying it in the port of Salina Cruz in order to export it to Japan... he essentially made clear Mirage’s projects are soon to be announced:
Yes, Mexico has a glut of natural gas because of the lack of infrastructure.. With no storage terminals, they still at best have a three day supply sitting in the pipes. This glut in combination with the ONLY existing natural gas pipeline stretching the Isthmus, being a measly 12”, is not near enough as it stands in order to create a liquefication facility in the port of Salina Cruz. We often talk a lot about our Isthmus project oil related. Let us not forget that we also are adding a brand new 42” inch line in order to support the current 12”. Absolutely crucial to Mexico’s plan, as announced yesterday, to build that LNG terminal in Salina Cruz. Of course, filling that 42” line obviously requires the rehab of the 48” San Fernando, and the Brasil Storage facility that feeds it.
The writing is on the wall!
Need4speed, key question:
What comes first; the chicken or the egg?
Does the article suggest the plants had to be canceled for lack of infrastructure to get the gas to them?
Quote:
“AMLO, as the Mexican president is known, noted that there is an excess of US gas in the country due to unfulfilled plans to build infrastructure and power stations. The pipelines that carry the fuel from the US fields to the other side of the border are finished [stop] before reaching the main energy and export centers.”
Thanks for the response! It certainly does seems like AMLO is finally going to play the right card. I’m encouraged.
Need4speed,
Perhaps that the CFE cancelled several plants this year along with the fact that there is a glut of US gas in Mexico..
Then again, this points to the need for storage.
What do you say?
Good to see continued optimism from the private sector players this week. Talos is in exploration, an especial are of conflict with the Mexican Government. Remember, as NGI has said, natural gas projects are "immune" to the private/public conflicts in Mexico. If Talos is optimistic, Sempra, NuStar, and Mirage the more. And that is exactly what we have scene from all three companies. Something is cooking this week!
https://www.naturalgasintel.com/talos-maintains-bright-outlook-for-private-sector-ep-in-mexico-despite-tension/
wow.. the BOLD
AMLO: Sempra will sell surplus natural gas from Mexico to Asia
August 10th, 2020
(Bloomberg) - Sempra is seeking a permit to sell natural gas stranded in Mexico to Japan due to a shortage of power plants to burn it, said the country's President Andrés Manuel López Obrador.
Sempra's Mexican subsidiary, IEnova, could reach an agreement to sell the gas to Asian buyers after local generation plants failed and efforts to build a pipeline in northern Mexico's state of Sonora were completed. They will stall due to local protests, the president said during a news conference on Monday.
AMLO, as the Mexican president is known, noted that there is an excess of US gas in the country due to unfulfilled plans to build infrastructure and power stations. The pipelines that carry the fuel from the US fields to the other side of the border are finished before reaching the main energy and export centers.
“We do not rule out that we can tender with companies to treat that gas, freeze it and sell it in Asia, because it is a gas that, even with the high tariff, is the cheapest gas in the world, the gas that is extracted from Texas, ”the president said.
The Government and IEnova are looking for alternative routes for the Sonora gas pipeline to avoid interfering in the sacred land of the Yaquis. Mexico also plans to build a new plant in Salina Cruz to treat gas from wells in the Gulf of Mexico and sell it to Asia, as well as transport gas to Quintana Roo and other areas of the country that have suffered blackouts as a result of fuel shortages.
In 2017, IEnova declared force majeure for the Guaymas-El Oro section of the Sonora gas pipeline, in Yaqui indigenous territory. It was part of a network that was supposed to transport gas more than 500 miles (805 kilometers) from Arizona to the Pacific coast of Mexico.
That's a great statement, Jackpot.
There is nothing on the books for this weekend.
We'll know early this coming week IF there is a work tour in the Isthmus the weekend of the 14th. AMLO ways specifies the weekend tours a few days prior.
The treasures run deep!
Can anyone deny Jeff Martin and Michael Ward's current identical experience with Mexico?
Both deal with the exporting of cheap US natural gas to Mexico.
Both target East Asia with US fuel.
Both are confident their export permits will be received this quarter.
"A Novel Request"
"Sempra Bullish on Natural Gas Infrastructure Projects"
08/06/2020
San Diego-based Sempra Energy executives remain confident that the Energía Costa Azul (ECA) liquefied natural gas (LNG) export project in Mexico’s Baja California will go ahead as planned despite the ongoing delay in receiving an export permit from the Mexican government.
CEO Jeff Martin acknowledged during the second quarter call to discuss results that the permit process had taken longer than expected but it’s by a private sector company, making it “a novel request". Traditionally state-owned enterprises had the domain and responsibility for the export of hydrocarbons. This would be the first permit that they’ve issued to a private sector company.
He said “the government has largely been shut down because of the pandemic” and that “despite the extenuating circumstances the conversations remain quite positive, and I’m optimistic that we’ll get the permit later in the third quarter.”
Executives did not provide a timeline for a final investment decision, however. The development cost was set earlier this year at $1.9 billion.
The proposed two-phase ECA liquefaction project, a joint venture between Sempra subsidiaries Infraestructura Energética Nova (IEnova) and Sempra LNG, would be built adjacent to the existing ECA LNG receipt terminal near the city of Ensenada.
“There certainly has been some disruption in terms of how the Morena party has been administering the government and its approach to energy generally,” Martin said, referring to Mexican President Andrés Manuel López Obrador’s ruling coalition party. Martin said he “had the good fortune of going to dinner with President López Obrador and President Trump two weeks ago, and there is true warmth and authenticity in that relationship.”
The ECA project, the first of its kind in the country, would import U.S. gas as feedstock with a $400 million pipeline on the Mexico side of the border. Last year, ECA received U.S. Department of Energy authorizations to export U.S.-produced gas to Mexico and then re-export it globally. The target market is East Asia.
An engineering, procurement, and construction agreement with TechnipFMC plc is in place and the Mexico export permit is the only missing piece. Executives also said during the call that force majeure claims from customers at the current import facility are “meritless” and would not impact the LNG export project.
NatGas Infrastructure Bet
With phase one of the Cameron, LA, LNG export project now complete, executives spoke bullishly about the future for natural gas, as well as the prospects for hydrogen, during the call.
Martin said the Cameron export facility was “substantially completed,” with commercial cash flow from all three LNG production trains expected to start within days. “Today we’re more strategically focused, more profitable, and more optimistic about our future growth prospects,” he said.
In response to concerns and questions on the resiliency of the global LNG market, Martin said it was best to look at the macro level and the mild winter this year in the Northern Hemisphere, as well as the pandemic’s impact on demand.
The International Energy Agency, he noted, “is predicting gas demand globally will decline this year by 4%, but the picture inside the LNG sector has demand increasing.
“Local demand for LNG over the first half of the year is one of the few commodities that is actually up close to 2%. U.S. LNG exports compared to last year are up 7%, and that’s a function of all the new capacity that has come online over the last 12-18 months, including Cameron. Interestingly, Europe is up 18% in the first half.”
Martin said there is “clearly an opportunity where LNG is quite competitive in many countries, where LNG is indigenous, such as Thailand. There, they are landing LNG twice as cheaply as they can produce it in their own economy. So I think there is continued optimism about LNG.”
Sempra LNG CEO Justin Bird during the conference call said the company’s team “continues to believe that the second wave of demand in the mid-2020s is a real opportunity.”
Roughly 80% of future gas demand is expected in the developing world, defined by the Asia-Pacific, Martin noted.
“There’s a big opportunity there, and I think the pandemic, if anything, is causing some LNG buyers to delay their decisions. It is also causing other infrastructure providers to fall behind on the wayside..
“It always comes back to what your competitive advantages are, and our approach has always been having competing, low-cost brownfield sites that can dispatch directly into the Pacific and the Atlantic. No other infrastructure provider in North America has that advantage.”
Bird said LNG supply has had an 8% growth rate, but Sempra expects it to “dramatically slow down to 1% annually…We think the supply growth will decrease as demand increases.”
Sempra is targeting 2021 to move forward on the Port Arthur LNG export project on the Houston Ship Channel. Management is talking with “many” shippers, but “there is no doubt that there has been a slowdown in the market as a result of Covid-19,” Bird said.
For the second phase at Cameron, Bird’s team is working with partners on conceptual work to optimize the expansion from a cost basis and timing perspective. “We continue to see long-term growth in the LNG business, but with a very disciplined capital approach.”
Longer term, hydrogen as a fuel is at a high-level of interest, Martin noted. Sempra is looking at up to 10 different projects that involve using hydrogen in transportation, blending opportunities in power generation, blending in compressor stations at the Southern California Gas Co. utility and injecting cost-savings and efficiency in existing facilities, such as LNG projects.
Sempra is “quite bullish on hydrogen and renewable natural gas, particularly here in California,” Martin said. “For the energy transition that is facing our sector and globally, hydrogen is going to play an increasingly important role. It is still a little bit early, but it is time now for us to establish a leadership position.”
Group President Kevin Sagara, who was CEO of Sempra’s other California utility San Diego Gas and Electric Co., also talked up hydrogen prospects. The company, he said, has an edge in California, which “has always led the way in clean energy…In this regard, I expect it will be no different. We see opportunities in our own system” for industry and transportation in which hydrogen could “play a key role, and we would expect our infrastructure to be right in the middle of it.”
Regarding the economics for commercial-scale hydrogen, Martin cited the commercial viability trendline for solar photovoltaics and predicted the same cost reductions would happen to hydrogen. “A lot will depend on what advances on the research and development side…to costs in the forward curve.”
For 2020, net earnings were $2.2 billion ($7.61/share), compared with $354 million ($1.26) for the same period last year. The two California utilities accounted for 60% of the holding company’s overall earnings, versus 80% in 2017.
Christopher Lenton contributed to this story.
https://www.naturalgasintel.com/sempra-bullish-on-natural-gas-infrastructure-projects-including-mexico-lng-export-facility/