Perth, Australia (ABN Newswire) - Liquefied Natural Gas Ltd (ASX:LNG) are pleased to provide a status update on the Magnolia LNG project.
- The FERC's DEIS comment period expired on 8 September 2015.
- LNGL and KSJV have agreed a schedule to conclude pricing negotiations and subsequent signing of the turnkey EPC contract in the fourth quarter 2015.
- Marketing of binding offtake agreements for 6 mtpa of Magnolia LNG capacity continues with some negotiations advanced.
Federal Energy Regulatory Commission (FERC)
Liquefied Natural Gas Ltd Limited (ASX:LNG) (OTCMKTS:LNGLY) wishes to advise on the outcome of the FERC's Draft Environmental Impact Statement (DEIS) comment period for Magnolia LNG. The FERC's DEIS comment period expired on 8 September 2015. The FERC's DEIS public comment process allows interested parties, including agencies, citizens groups, and individuals, to review FERC's extensive environmental analysis and provide feedback to FERC to be incorporated into the final environmental impact statement (FEIS), if appropriate.
Several entities submitted letters to FERC stating that after reviewing the DEIS they agree with FERC staff's conclusions and recommendations and have no comment. One substantive comment was received from the National Marine Fisheries Service (NMFS) recommending resolution of certain dredging issues in advance of the FEIS. Magnolia LNG is working with FERC, NMFS and the Army Corps of Engineers on this matter and expects to have it resolved promptly. The EPA regional office also offered comments to FERC that are consistent with its comments in other LNG export projects. Magnolia is confident that it can address the EPA's comments to the satisfaction of its obligations under the National Environmental Policy Act.
Engineering, Procurement, and Construction (EPC) contract
The Company wishes to provide an update on the status of Magnolia LNG's EPC contract negotiations with the KBR-SK joint venture (KSJV) LNGL and KSJV have agreed a schedule to conclude pricing negotiations and subsequent signing of the turnkey EPC contract in the fourth quarter 2015. KSJV will provide LNGL a fixed-price on the full 8 million tonnes per annum (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 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(R) (optimized single mixed refrigerant) process design provided by LNGL.
The Company wishes to provide an update on the status of Magnolia LNG's marketing efforts for the remaining 6 mtpa of Magnolia LNG offtake capacity.
On 23 July 2015, Magnolia LNG announced a binding offtake agreement with Meridian LNG Holdings Corp for firm LNG production capacity of 1.7 mtpa, with a possible further 0.3 mtpa to be offered at Magnolia LNG's discretion.
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. Current negotiated pricing remains at levels supporting previously announced (30 July 2015) EBITDA guidance of $2.50/mmBtu across the full 8 mtpa project.
LNGL will update the market further on terms and conditions of the EPC contract and marketing efforts, respectively, once binding agreements are signed. Any updates will be after 30 September 2015. The Company continues to discuss the provision of equity by Stonepeak Infrastructure Partners and debt arrangement with BNP Paribas in relation to the 8 mtpa Magnolia LNG Project.
About Liquefied Natural Gas Ltd:
Limited Natural Gas Limited (LNGL) (ASX:LNG) (OTCMKTS:LNGLY) is an ASX listed company focused on development of mid-scale LNG plants. LNGL's business strategy aims to deliver lower capital and operating costs, faster construction timelines and improved efficiency, relative to larger traditional LNG projects. LNGL's portfolio includes 100% ownership in Magnolia LNG LLC, Bear Head LNG Corporation, Gladstone LNG Pty Ltd, and LNG Technology Pty Ltd, which owns and develops the OSMR(R) LNG liquefaction process.
Liquefied Natural Gas Ltd
Mr. Maurice Brand
Managing Director & CEO
Mr. David Gardner
Mr. Mike Mott
Chief Financial Officer
Liquefied Natural Gas Ltd
Source: ABN/Asia Business Newswire
(September 13, 2015 - 6:43 PM EDT)
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