KMLP files application with FERC for Magnolia gas transport

Kinder Morgan’s unit Kinder Morgan LouisianaPipeline has filed an application with the US Federal Energy Regulatory Commission (FERC) seeking the Commission’s authorisation to install compression and other related facilities on the KMLP Pipeline, allowing gas to be transported to LNG Limited’s Magnolia LNG (MLNG) project, which is located along the Calcasieu River, near Lake Charles, Louisiana, United States of America.

The KMLP Pipeline transverses the Magnolia LNG project’s site. The expansion of the KMLP Pipeline involves the installation of new compression facilities and the interconnect facilities between the MLNG project and the KMLP Pipeline. This expansion will enable gas supply of up to 1,400,000 Dth/day for the 8 mtpa Magnolia LNG project site from several major interconnected interstate pipelines in the region.

As part of KMLP’s FERC application, MLNG and KMLP executed a first amendment agreement to the precedent agreement, in which i) KMLP and MLNG have agreed to the final form of the firm transportation service
Agreement; and ii) KMLP has confirmed the final design and rates for the expansion facilities for the KMLP Pipeline.

KMLP’s FERC approval process will run in parallel with FERC’s regulatory review of the MLNG Project. FERC formally accepted the MLNG Project’s filing application on 15 May 2014, as announced to the ASX.

Following KMLP’s FERC filing, FERC staff will now prepare a draft environmental impact statement (DEIS) to satisfy the National Environmental Policy Act. The DEIS will be open for review and comment by the public and other federal, state and local agencies. Anticipated timing for the DEIS is late 2014.

MLNG expects the final environmental impact statement (FEIS) to be issued approximately 4 months after the DEIS, which the company anticipates will be in March/April 2015. The final stage of the FERC process incorporates:

• The issuance by the Commission of a conditional order approximately 30-45 days after the FEIS authorising the project; and
• Following the satisfaction of key conditions in the conditional order, FERC staff would then issue a Notice to Proceed (NTP) that would authorize MLNG to commence construction on the MLNG project. The issuance of the NTP would be a condition to MLNG achieving financial close.

The Company’s Managing Director, Maurice Brand, said ‘This is another important milestone for the MLNG Project. Following the Kinder Morgan and MLNG FERC Filings, there is a proven regulatory process and indicative timetable that helps us work towards Financial Close of the Project in mid-2015. This process incorporates FERC engaging an independent consultant to prepare an Environmental Impact Statement (EIS) to satisfy the National Environmental Policy Act (NEPA). The EIS is open for review and comment by public and permitting agencies”.

“We are on target for the planned Financial Close for the Magnolia LNG Project in mid 2015”, said Brand.

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Press Release, July 1, 2014