Magnolia LNG Signs HoA with GNF (USA)

LNG Ltd has signed a non‐binding Tolling Heads of Agreement (HOA) with Gas Natural SDG, S.A. (GNF), part of the Gas Natural Fenosa Group, in relation to the Company’s 100% owned Magnolia LNG Project, in Louisiana, USA (MLNG Project).

The term of the HOA is to 30 June 2014 and, under the provisions of the HOA, GNF will now undertake detailed due diligence of the MLNG Project and the Company will prepare the first draft of the proposed definitive Tolling Agreement. The Tolling Agreement will be between GNF and the Company’s wholly owned project company, Magnolia LNG, LLC (MLNG).

The HOA provides for a proposed 20 year Tolling Agreement, including firm LNG production capacity of up to 1.7million tonnes per annum and additional interruptible capacity.

Under the proposed Tolling Agreement GNF will be responsible for delivery of gas, including gas usage for the LNG plant, at its own expense, to the MLNG Project for liquefaction,storage, and delivery onto LNG ships arranged or designated by GNF. In consideration of MLNG’s provision of the tolling services, GNF will pay to MLNG a fixed monthly capacity fee, over the 20 year tolling term, and other fees in relation to the MLNGProject’sfixed and variable operating and maintenance costs.

The Company is bound by a Confidentiality Agreement with GNF and has not been required to previously disclose the signing of the HOA, under its continuous disclosure obligations. In this regard, the Company has relied on the disclosure exceptions afforded by ASX Listing Rule 3.1A (which exceptions do not apply to a CleansingNotice, as prescribed by section 708A of the Act).

GNF is a leading multinational group in the energy sector, pioneering in gas and electricity integration. It currently has a presence in more than 25 countries, across 5 continents, where it offersservicesto more than 20 million customers. GNF has 16 gigawatts of installed power and a diversified mix of electricity generation plants. GNF isthe largest integrated gas and electricity company in Spain and Latin America, leading the natural gassales marketin the Iberian Peninsula, and isthe major distributor of natural gasin Latin America.

GNF has a natural gas and LNG supply portfolio of around 30 billion cubic metres and a fleet of 10 LNG tankers (7 belonging to GNF, 2 to Unión Fenosa Gas and 2 jointly owned by Repsol, run by Repsol Gas Natural LNG), making GNF one of the major global LNG operators in the Atlantic basin and the Mediterranean.

GNF has stakes in three regasification plants (Reganosa‐A Coruña, Saggas‐Valencia and Puerto Rico) and in two liquefaction plants (Damietta‐Egypt and Oman), and has a regasification terminal project in Italy, Trieste‐Zaule, which is currently in the process of obtaining allrequired licenses.

GNF is also a foundation LNG buyer of the Cheniere Partners, Sabine Pass LNG Export Project, also located in Louisiana, USA. The project comprises up to four LNG trains, providing planned aggregate LNG production capacity of approximately 18 mtpa, with construction of the initial two LNG trains having already commenced. As a result, GNF has a very close involvement and understanding of the USA LNG industry.