Magnolia LNG signs EPC contract term sheet with SK E&C
Magnolia LNG, a unit of LNG Limited, said that an EPC contract term sheet has been executed with SK E&C USA in relation to the first phase of its project.
The Magnolia LNG project comprises the development of an 8 million tonnes per annum (mtpa) LNG export project on the Calcasieu Ship Channel’s Industrial Canal, near Lake Charles, La. The project will be developed in two phases, with the initial phase comprising two LNG trains, each of 2 mtpa LNG design capacity, two 160,000m3 storage tanks, jetty and ship loading facility and
The EPC term sheet details the generally agreed position of SK E&C and Magnolia LNG in relation to over 45 key commercial provisions to be further developed and included in a lump sum turn key (LSTK) EPC contract. BNP Paribas, Magnolia LNG’s project finance adviser and Merlin Advisors LLC, the lenders’ technical consultant, contributed to the establishment of the EPC term sheet to assist in ensuring bankability of the provisions.
Magnolia LNG’s Chief Operating Officer, John Baguley, said “LSTK EPC Contracts are very detailed and comprehensive contracts and their negotiation can be extremely protracted. The EPC Term Sheet will materially assist in the early drafting of the LSTK EPC Contract and pave the way for a much shorter negotiation and completion period.”
Baguley further said, “SK E&C is continuing to progress the FEED and build-up of the LSTK EPC Contract price under a separate Technical Service Agreement signed in April 2014, and at this stage the program is on schedule and within budget.”
The company also said that Greg Pilkinton will join the Magnolia LNG team, as EPC Contracts Manager on July 14, 2014. This will shortly be followed by the appointment of an EPC Planning Director; VP Engineering and Construction, and SVP Facilities Operations.
‘These additional personnel will round out Magnolia LNG’s core engineering, construction and operations team, to enable us to keep pace with the SK E&C work outflow and maintain adherence to the current target to achieve a Financial Close in mid-20l5,” said Baguley.
Press Release, July 11, 2014; Image: Magnolia LNG