abarrelfull wrote on 24 Jul 2015 06:18
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Liquefied Natural Gas Ltd (LNGL or Company) is pleased to advise that its 100% owned project company, Magnolia LNG, LLC (Magnolia), has signed a legally binding agreement with Meridian LNG Holdings Corp (Meridian LNG) for firm capacity rights for up to 2 million tonnes per annum (mtpa) at Magnolia LNG, located on the Calcasieu shipping channel in the Lake Charles District, State of Louisiana, USA.
Under the liquefaction tolling agreement (LTA), Magnolia will provide liquefaction servicesto Meridian LNG over the term of the contract in return for monthly capacity payments. Meridian LNG is responsible for procurement and delivery of feed gas to the liquefaction plant and for arranging all LNG shipping required to transport the LNG from the liquefaction plant to its customers.
Meridian LNG intends to deliver the LNG to Port Meridian, its Höegh LNG operated floating re‐gasification terminal in the UK with the gas delivered to E.ON Global Commodities (EGC) under the 20‐year gas sales agreement (GSA) executed and announced by Meridian LNG on 23 April 2015.
Key terms of the LTA include:
- Initial term of 20 years, with option to extend by a further 5 years;
- Firm annual capacity of 1.7 mtpa with a further 0.3 mtpa to be offered at Magnolia’s discretion; and
- Conditions precedent, including that Magnolia achieves financial close no later than 30 June 2016.
“We have been working with Meridian LNG since late 2013 and are delighted to have completed our first binding liquefaction tolling agreement. This is another significant milestone for Magnolia toward fully subscribing our 8 mtpa project,” said Magnolia LNG Chief Commercial Officer, Rick Cape.
“Meridian LNG is very pleased to complete our LTA with Magnolia and looks forward to participating alongside other off‐take participants in this impressive and innovative LNG export project. This agreement marks a critical step towards fulfilling our commitment to deliver up to 750 million standard cubic feet a day of natural gasto E.ON Global Commodities, for 20 yearsfrom 2019, via our UK Port Meridian terminal”, said Roger Whelan, CEO Meridian LNG.
LNGL Managing Director/CEO and President of Magnolia LNG, Maurice Brand said, “Financial close for the Magnolia project is planned for first quarter 2016. The Magnolia project remains on schedule to provide first LNG in December 2018 with full LNG supply of 8 mtpa completed in 2019.”
To this end, Mr. Brand further stated, “In light of market interest in the Magnolia LNG project, we have asked the KBR‐SK Joint Venture (KSJV) to provide a fixed‐price turnkey EPC contract price on the full 8 mtpa project, rather than just the original Phase I project of 4 mtpa. The KSJV pricing will be firm for a six‐month period from signing, aligning with our targeted first quarter 2016 financial close. Our marketing efforts continue to progress and shareholders should expect an update regarding status of other binding contracts
to coincide with the KSJV EPC announcement and/or later in the last quarter of 2015.
ABOUT MAGNOLIA LNG
The Magnolia LNG project is 100% owned by Magnolia LNG LLC, which is a wholly owned subsidiary of
Liquefied Natural Gas Limited. The project comprises the proposed development of an 8‐mtpa LNG
project on a 115‐acre site, located on an established LNG shipping channel in the Lake Charles District,
State of Louisiana, United States of America. The project is based on development of four LNG production
trains of 2 mtpa each using the Company’s wholly owned OSMR® LNG process technology.
Magnolia’s business model providesliquefaction servicesto LNG buyers who pay a monthly fixed capacity
fee, plus all LNG plant operating and maintenance costs. LNG buyers contract for liquefaction services
under two contract models – a LTA, whereby the LNG export terminal is only responsible for processing
natural gas into LNG, and a LNG Sales and Purchase Agreement under which the customer buys LNG on a
free on board basis (FOB).
ABOUT MERIDIAN LNG
Meridian LNG is a wholly owned portfolio company of a fund advised by West Face Capital Inc., a Toronto‐
based institutional investment manager. Meridian LNG is focused on the development of Port Meridian
together with Höegh LNG under a joint development agreement (JDA). Today’s announcement follows
Meridian LNG’s execution of its 20‐year GSA with EGC, a wholly owned company of E.ON, announced on
23 April 2015. Meridian also plans to develop an LNG import terminal located offshore Long Island, NY
(www.portambrose.com) to address seasonal or peak natural gas demand.
For further information, please contact: moc.gnlnaidirem|ofni#moc.gnlnaidirem|ofni.
HÖEGH JDA
Meridian LNG, through the JDA with Höegh LNG, will ship LNG to Port Meridian LNG using traditional LNG
carriers. The LNG will then be stored and regasified using a floating storage and re‐gasification unit (FSRU).
Höegh will act as the supplier and operator of the FSRU and carriers (collectively Vessels) and under an
option agreement included in the JDA, Meridian LNG may acquire a 49% interest in the Vessels.
For more information on Höegh LNG, please visit www.hoeghlng.com.
PORT MERIDIAN
Port Meridian will consist of a FSRU, a subsea pipeline, and onshore facilities connecting into the UK
National Transmission System (UK NTS). All major construction permits and planning approvals for Port
Meridian have been obtained. Gas deliveries are expected to commence in 2019 subject to Ofgem granting
a third party access exemption to Port Meridian and Meridian LNG.
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