the second of two lng tanks we are building.going up top so you can get an overview of the entire operation we have going on here. this is one of the two lng tanks on the side. this is where it will be cooled before it is moved to the loading jet out there. erik: what are we looking at? >> the inside of a tank, 92 meters in diameter, 47 meters tall. it will be full of natural gas every couple days. that is big. that is very big. erik: wheatstone is set to start production in 2016. so far, it is on target. gorgon, which was greenlighted at $37 billion, is wildly over budget and a year behind schedule. >> it was one of the worst in the industry. if the harvard business school wanted a case study of what not to do, it would be gorgon. chevron as the operator has 50% interest. they just bit off more than they could chew. it was too big. whether they want to admit it is too big, maybe we should ask companies that have more experience and have been through this before. unfortunately, they did not ask for help. they did not get help. a

it will take until you start exporting natural gas, until you start using lng, shipping it abroad, and higher power burn using natural gas as coal plants retire. that will help the supply get soaked in by higher demand. it becomes more attractive for the end user as gas prices fall. coal is less attractive. guest: there is somewhat of a asked pricese when come down. the gas assets can do ok, offsetting what our lance use when prices go up. that is when our plants come into money which illustrates the natural hedge in our portfolio. what you need to do during these times as you have to hang in there and manager cost as well as you possibly can and recognize there is other dynamics happening in the power market that it is not just about natural gas anymore. you are seeing a dramatic decline in supply of generation assets and that will drive higher capacity prices and more expensive units are going to start setting the price for power. that offsets the decline in natural gas to some extent. a 1.1 21 $.2e billion for capital allocation. our portfolio is largely open. it would reduce the am

it is becoming the biggest lng producer in the world.et's see if total or exxon are bp will be able to catch up or else chevron. it may be with organic projects, so there is a lot of new lng product being developed now. but with acquisitions, it doesn't look like it. anna: how was the fall oil price affecting a businesslike bp? we will hear from them at the top of the hour. how do they manage in this environment? we have a lot from the oil majors about doing the benefits of a diverse business, refining and marketing alongside production. how does a businesslike bg cope? philipp: the gas prices are links to the oil price with a couple of months lag. it's not like refining where you have a hedge against oil price. it will also affect bg's business, just later. anna: ok. philipp, thank you very much. stay with "countdown." we will bring you bg group group's earnings as they break at the top of the hour. that will be followed by a exclusive interview with the company's ceo. he will be speaking to us a little bit later. a reminder that later

erik: from angola to australia -- >> you're looking at the inside of an lng tank. a thirst for energy has pushed chevron to almost every corner of the globe. >> we believe there's opportunity to progress. >> good job, erik. erik: the giant company is active in 180 countries. >> it is the largest resource project in australia. erik: pumping almost 2.6 million barrels every day. these are challenging times for big oil. fracking has upended the global market. renewables lik

gas production is this new phenomenon which is lng exports area do you see over the next couple yearsgible demand bcrf a day. to 10 producingther gas basins. it is a pretty efficient market and there will be opportunities so we are pretty darn constructive in the recovery of natural gas. alix: you mentioned hedges are a way that you have able to stay afloat but once they run off, what do you do when you still have northeastern natural trading one dollar below henry hubbs natural gas price? guess: you have to make sure you are hedging to the curb. alix: that will not do anything for you in the long run. challengings a rice. for companies like rice, the majority of our production is a trance ordered to markets like the gulf coast in the midwest read we have capacity that will go to canada once these expansion project go online. certainly for the guys that are stuck here in appalachia and they are not hedged, they are in a world of hurt right now. it is a matter of looking out over the next couple of years and making sure economics work at those prices. there is not a lot of areas in the

guest: perfectly understandable question for many of the lng exporters.acility is under contracts the go until 2037. whether the shippers use the gas are not, they will still be paying for our facilities. to natural gass prices, oil prices makes no difference. we are selling at half of it through companies in japan and have a the output to companies in india. like another dividend play, if you will. your other area of growth is a pipeline you are working with, duke energy. you are collecting gas from the marcella and utica's shales. what is the chance that alternative energy or nuclear will start to steal some of that demand from you? that is the way we try to do business at dominion, that forline is fully subscribed , four 20 year contracts. whatever is going on in other forms of energy, or shareholders are protected from whatever happens. alix: what is the likelihood that you might expand it? to expandare hoping that. it is easily expandable. right now it is scheduled to be a billion and a half cubic feet per day. it is easily expanded to two billion pe

erik: from angola to australia -- >> you're looking at the inside of an lng tank. erik: a thiror

francine: and lng is the future? manish: i think it is.n you talk about energy, it is the demand side. if you see the u.s., we had 1.3% in 2012 2.6% in 2013. the growth is stagnating. these sectors -- i'm not a holder of oil majors, but when the time is right, we go back into oil majors as well. anybody that says chinese growth is going to decelerate a lot, we are not talking about china getting rid of bus rides. manus: ok, thank you very much for coming in and going through all of that. great conversation with you both. francine: we've covered oil quite a lot. the difference ceo's had different predictions. up next, how the micro crisis is playing into the eu referendum argument in britain. ♪ francine: welcome back to "the pulse" live from bloomberg's european headquarters in london. manus: let's get you some of our top headlines. bnp paribas swung to its highest quarterly profit in three years. its trading revenue rose and france's biggest bank benefited from one-off gains. revenue gained 16%. francine: the slump in oil prices has hit bg

to mexico lng, coal plant retirement and a somewhat improvement in the industrial demand outlook. >>kly before we wrap, i realize you're not a fixed income guy obviously. >> to the concerns that some people continue to have, maybe even voicing a little bit louder these days, of potential blow-ups in high yield in the energy space. are you as concerned as some others, will we see the number of companies blowing up relative to that increase dramatically? i think when we think about high yield as a percentage of overall financing of the sector, it needs to come down i like to point out there's four ways it can come down. one through bankruptcy. which we don't put a high probability on that the other way is we have large players like the integrated oils buying out the smaller players and taking the debt out that way. the third way is when we think about private equity. purchasing the bonds, forcing the default and taking ownership of the equity that way. the fourth way is the companies issue equity and pay down the debt. it depends whether you want to be long the debt or short the debt.

just what the argument is is that it's more valuable than as an export product where of course, with lng prices for example, in parts of the world there's quite a bit of rent to be captured. >> yeah, sure, sure. secretary lew, appreciate your patience today. you haven't been called on that much. but in light of the how tantalizing the sanctions have been on this economy, it still strikes me odd that iran would continue to move toward this very, very expensive construction project as opposed to other alternatives. does it seem odd to you? i mean billions and billions -- >> which expense? >> the actual expense of constructing nuclear power plants. they've been under great stress economically. >> i think that they have been under enormous stress, like any government, they make decisions based on their short and long-term needs. i can't question why they've chosen one form other another. inadequate in order to have a foundation for economic growth, they do need more power. and that's going to require investment. it's one of the reasons that i believe they have domestic needs. their domestic

lng we have not gotten all the down data down, and we're looking forward to getting it down. i in the meantime let me tell you a little bit about whatpping: we think is happening. already discussedalready discussed we no the answer is nitrogen and suspected is escaping because of the wicked gravity. it's about -- is a lotogen we weaker than earth and mars. and so we no that it is going away. we will we think is happening is that the solog when that comes from the south with protons and electrons, charged particles streaming out at supersonicharging speed will eventually crash in, interact with the escaping alister, and this will then produce probably suspect a shark upstream. maybe it is not quite sok. soft. we know therewe know there is an upstream amount of nitrogen irons. they have already observed that with the instrument well upstream.ths andand that was energized by the silhouette and carried t away by the solar wind. buty the real question is what happens as it interacts withs. the denser escapinggr atmosphere that was beingt talked about.ll what happens is -- and this

but just what the argument is that it's more valuable thanes a an export product where of course with lng prices for example, in parts of the world, there is quite a bit of rent to be captured. >> yeah sure, sure. secretary lew, i appreciate your patience today. haven't been called on that much. but in light of how penalizing the economic sanctions have been on this economy, it still strikes me odd that iran would continue to move toward this very, very expensive construction project as opposed to other alternatives. does this seem oddi mean billions and billions of dollars to build a nuclear power plant. >> which expense? >> the expense of actually constructing nuclear power plants. they've been under great stress economically. >> i think that they have been under enormous stress like any government, they make decisions based on their short and their long-term needs. i can't question why they have chosen one form of a power plant over another. what i do know is their infrastructure including their power is inadequate. north to have economic growth, they do need more power. and that's goi

so we chose an lng because it's cheap. it's four times cheaper than kerosene. it's available and it's clean. so it supports reusability applications which we are interested in in the long-term and those are very important points that we want to add. >> i yield back. >> i thank the gentleman. the chair now rises mr. lamborn from colorado for five minutes. >> thank you mr. chairman. i'd like to drill down a little bit more on a line of questions i was pursuing earlier to hopefully get more clarity. the general stated that spacex has not formally submitted the changes to be accepted under certification for the full thrust system to the air force, unquote. if spacex hasn't formally submitted the changes how is it that your system should be certified for launch or illegal for competition on eelv? >> sir, i'd have to get back to you on the specifics of was been transferred. but i can tell you that to my knowledge presently since the last hearing there has been numerous conversations between the air force and spacex specifically to address this information. i believe