The lawsuit fault will be split amongst all parties, including the guy, and will either be settled quick or take 3-7 years.
Shouldn’t be an issue for FID and not sure why people are so concerned with it. It was also a closed valve, and not a failure of the pipeline or necessarily someone being cheap. Just operational or systemic error, as far as we can tell, so no reason for concern yet.
The big thing is the hydrostatic test, which has not been done since inception of the line. My understanding, is that it typically happens after FID and before first draw of funds, but all depends on the banks’ requirements and how they assess this offshore segment as it relates the project.
A few things can happen:
1) This gets delayed until PHMSA is satisfied in a few months
2) Banks allow limited FID, conditional on testing
3) Banks are cool and move forward with full FID this month
4) Hydrostatic test fails and re-permiting needs to happen, but unlikely and testing was going to probably happen anyway at some point prior to drawdown of funds.
If they do make FID, then I would also brace for 30-90 days for a merger and not immediate just in case people start doubting themselves at that point. I expect it sooner and maybe same day, but not always their style.
Beyond that, I would question them waiting until later when the ships are closer to operation.
However, investors and the company would like the liquidity early, risk off while waiting for 3 years, and I just don’t think the company planned on holding the shell so long all through the permitting and also the ship build.
A lot of other things can blow up, go wrong, or wars can happen in 3 years. I think the investors would want some liquidity exit while their money is tied up for so long in such an expensive project.
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