LNG Limited completes Magnolia EPC contract with KSJV

Liquefied Natural Gas Limited’s Magnolia LNG has agreed a US$4.35 billion contract with the KBR-SKE&C joint venture.

The EPC contract covers the engineering, procurement and construction of four LNG production trains with a design capacity of 2 mtpa or greater each.

It also includes wo 160,000 cbm full containment storage tanks, LNG marine and ship loading facilities, supporting infrastructure and all required post-FID approvals and licenses.

Earlier in August MLNG selected Siemens Energy process compression and driver equipment which could potentially enable higher final plant design capacity which, following completion of remaining engineering and analysis, will be confirmed prior to the final investment decision, LNG Limited said on Monday.

As a result, MLNG’s per tonne EPC cost may reduce within the range of US$495/tonne – US$544/tonne based on the final installed capacity design.

The EPC guaranteed production totalling 7.6 mtpa for the four-train MLNG project will not change, the company said.

The KSJV also provided pricing on a reduced (three train) project scope. The take-out cost for one train, estimated by KSJV at US$630 million, is subject to final confirmation by 31 December 2015.

LNGL Managing Director and Chief Executive Officer, Maurice Brand said, “With the execution of the EPC contract in hand, we shall continue with final engineering activities but will not commit to out-sized, non-cancellable commitments in advance of execution of offtake agreements for at least 4 mtpa of additional sales.”

For a period of up to 15 years following the declaration of the commercial start date for each train, the KSJV may be eligible for annual revenue sharing payments ranging from $0 to $30 million across the four-train plant (maximum of about $0.07/mmBtu per annum).

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LNG World News Staff; Image: LNG Limited