USA: Magnolia LNG Project on Track
Liquefied Natural Gas Limited provided a general update on the development progress of its wholly owned 8 mtpa Magnolia LNG project in Louisiana, United States of America.
The MLNG project is held through the company’s indirect 100% owned US subsidiary, Magnolia LNG and is being designed to comprise four LNG trains, each of 2 mtpa nominal LNG production capacity.
As announced on 26 November, the company has signed a tolling term sheet with LNG Holdings Corp. The term sheet provides for a proposed 20 year tolling agreement, covering firm LNG production capacity of 1.7 mtpa. Under the proposed tolling agreement, LNG Holdings will be responsible for delivery of gas to the MLNG Project for liquefaction, storage, and delivery onto LNG ships arranged or designated by LNG Holdings. In consideration of MLNG’s provision of the tolling services, LNG Holdings will pay to MLNG a fixed monthly capacity fee, over the 20 year tolling term, and other fees in relation to the MLNG Project’s fixed and variable operating and maintenance costs.
Based on the terms of an existing tolling term sheet and tolling heads of agreement, MLNG has now issued draft definitive tolling agreements to Brightshore Overseas (a member of the Gunvor Group), for firm LNG production capacity of 1.7 mtpa and Gas Natural SDG S.A (a member of the Gas Natural Fenosa Group), for firm LNG production capacity of up to 1.7 mtpa.
Negotiations are continuing with a number of other parties to secure tolling arrangements for the MLNG Project’s remaining LNG production capacity. On the 13 December 2013, the company announced MLNG’s appointment of BNP Paribas as Project Finance Advisor.
MLNG is in the finals stages of:
- selecting its preferred engineering, procurement and construction contractor; and
- agreeing the terms of a definitive precedent agreement for the transportation of gas to the MLNG Project. Responsibility for the supply and transportation of gas will be assumed by the tolling parties on the execution of definitive tolling agreement;
Following the October 2013, execution of a definitive equity commitment agreement, between MLNG and Stonepeak Partners, Trent Vichie, Managing Director and Co‐Founder of Stonepeak has joined the Board of MLNG. The parties are now working closely together on all aspects of the MLNG Project, to a targeted financial close in the first half of 2015.
MLNG is on track to open its local project office in Lake Charles Louisiana in January 2014 after planned tenant improvements are completed.
LNG World News Staff, December 16, 2013; Image: LNG Ltd.