LNG Ltd., the Australian company developing the Magnolia LNG export plant in Louisiana, said it was still concentrating its marketing efforts on closing long-term capacity sales agreements for its proposed export facility while providing acceptable returns to shareholders.
The company’s Chief Executive Gregory M. Vesey gave an update on marketing efforts that have still not resulted in a signed supply contract to enable the go-head for Magnolia LNG and eventually another export project, Bear Head LNG proposed for Nova Scotia in Canada.
“The second quarter of LNG Ltd.’s fiscal year featured continued emphasis on signing long- term offtake contracts for Magnolia LNG while ensuring that our best in class project execution and delivery strategy is fully ready to meet customer needs arising in this LNG market environment,” said Vesey.
In latest developments for the Magnolia project, the company said that at the end of December 2018 it had moved ahead with plans to increase volumes of LNG from 8 million tonnes per annum to 8.8 MTPA and filed an application with US Department of Energy to increase the quantity of authorized exports of domestically produced gas to non-free trade agreement and free trade agreement nations.
LNG Ltd. Has again extended the validity period for six months or its current binding engineering, procurement and construction with the joint venture comprising KBR of the US and South Korea’s SK Engineering and Construction.
The binding lump-sum, turnkey with $4.35 billion contract is now valid through June 30, 2019.
During the fourth-quarter, Bear Head LNG continued to market feed-gas capacity primarily to major Western Canadian Sedimentary Basin producers and to address gas route solutions with Canadian pipeline companies.
“Most LNG industry participants are bullish on the prospects for execution of new long-term offtake agreements in 2019,” said Vesey.
“Consistent with this thesis, active negotiations for Magnolia LNG capacity continue with focus on Asian and European customers,” he added.
“Efforts with select Asian counterparties progressed substantially in the period despite uneven trade discussion rhetoric. Similarly, we are making positive progress with key counterparties in Europe,” stated the CEO.
The company reported that as it moved towards a final investment decision for the Magnolia project, it incurred one-time charges during the quarter working with our existing project partners.
Payments made for work performed with the Kinder Morgan Louisiana Pipeline and Magnolia’s engineering contractors to refresh and update the project’s pipeline capacity and engineering elements, increased cash outflow in the quarter.
“We closed December 2018 with the company’s total cash position at A$36.6 million US$26.6M) and remain debt free. We continue to manage our liquidity closely, consistent with our stated plans,” said LNG Ltd.
