LNGL advancing talks over Magnolia LNG remaining capacity

LNG Limited informed that it has agreed a schedule to conclude pricing negotiations and subsequent signing of the turnkey EPC contract for the Magnolia LNG project with the KBR‐SK joint venture in the fourth quarter 2015. 

KSJV will provide LNGL a fixed‐price on the full 8 mtpa project, as well as a 6 mtpa project, providing certainty of pricing for a six‐month period from the EPC contract’s effective date, the company said in a project update.

The two firm KSJV prices allow LNGL flexibility in its FID decision to match a firm EPC contract price with the outcome of ongoing liquefaction capacity marketing efforts, without further KSJV negotiations during the six‐month period.

As part of the EPC contract, the KSJV will fully guarantee the LNG production and fuel gas efficiency of each train at the guaranteed production rate of 206 metric tons/hour (1.7 mtpa equivalent) and fuel gas efficiency of 8%, incorporating the OSMR process design provided by LNGL.

LNG Limited also revealed in the update that FERC’s draft environmental impact statement comment period for Magnolia LNG project has expired on 8 September.

One substantive comment was received from the National Marine Fisheries Service recommending the resolution of certain dredging issues in advance of the final EIS. Magnolia LNG is working with FERC, NMFS and the Army Corps of Engineers on this matter and expects to have it resolved promptly, the company said.

LNG Limited also added that marketing of binding offtake agreements for the remaining 6 mtpa of Magnolia LNG capacity continues with a number of investment‐grade, as well as some non‐investment grade counterparties.

Certain negotiations (with investment‐grade counterparties) are advanced and progressing through the internal investment decision authorisation processes attendant to each counterparty.

Each of the offtake negotiations are for initial 20‐year terms, with some taking the form of a liquefaction tolling agreement and some being LNG sale and purchase agreements, LNGL said.

LNG World News Staff; Image: Magnolia LNG