LNG

Glenfarne Group, the owner of the Magnolia LNG export project in Louisiana, has made a request to the Federal Energy Regulatory Commission for five more years to complete the plant and associated facilities.

The regulators had previously approved construction of Magnolia LNG and related pipeline expansions in April 2016 under its previous owner, the Australian-listed company LNG Ltd that ceased trading amid financial difficulties.

That approval had required LNG Ltd to complete the project within five years, by April 2021.

The Magnolia plant is proposed for a 115-acre site near the Calcasieu Ship Channel. It is designed to produce 8.8 million tonnes per annum of LNG from four Trains.

“Unforeseeable developments in the global LNG market have affected Magnolia LNG’s ability to enter into long-term LNG offtake contracts,” privately-held Glenfarne told the FERC in requesting the extension.

“Magnolia and pipeline provider Kinder Morgan request a five-year extension of their authorizations, up to and including April 15, 2026, to place the Magnolia LNG Project facilities and Lake Charles Expansion Project facilities, respectively, into service,” Glenfarne added in its Magnolia project filing.

A final investment decision had not yet been taken on Magnolia as it sought to finalize a purchase agreement with a Vietnamese power and import venture in the Mekong Delta. That accord has now lapsed.

Glenfarne also acquired LNG Ltd.’s patented optimized single mixed refrigerant (OSMR) liquefaction technology from the Australian administrators.

Its purchase of Magnolia boosts the amount of US LNG export capacity Glenfarne has under development to 12 MTPA as it also owns Texas LNG Brownsville.

The Texas project received authorization from the FERC in November 2019 for the facility to be sited along the Brownsville Ship Channel.

Texas LNG seeks to supply Permian feed-gas as LNG to global customers along with two other rival projects being developed alongside.

These are the Rio Grande LNG project with five liquefaction Trains and over 26 MTPA of output and the smaller scale Annova LNG venture.

Rio Grande is own by NextDecade Corp and one of the main shareholders in Annova is Exelon Corp, the utility headquartered in Chicago.

All three Brownsville projects have pushed back their investment decisions and original construction and engineering timetables.

Glenfarne’s Texas LNG leadership still includes the project's co-founders, Chief Executive Vivek Chandra and Chief Operating Officer Langtry Meyer.

The sale to Glenfarne by the Australian administrators of LNG Ltd assets did not include the proposed Bear Head LNG project in the Canadian province of Nova Scotia with 12 MTPA of capacity.

Pieridae Energy, the developer of the German-backed Goldboro LNG project in the Canadian Atlantic province of Nova Scotia, has had its purchase of Royal Dutch Shell’s midstream and upstream assets in the southern foothills of Alberta blocked by the provincial regulator.

Global Energy Megatrend Ltd., the new owner of the US Magnolia LNG export project, counts among its six named directors, Lord Peter Lilley, a former UK Conservative government minister under Margaret Thatcher and John Major.

The Australian-listed developer of the US Magnolia LNG plant in Louisiana with an export accord to supply cargoes for Vietnam has run out of money and time after a takeover by a private firm from Singapore fell through, along with short-term financing arrangements.

The Australian-listed developer of the US Magnolia export plant in Louisiana with an agreement to supply cargoes to Vietnam said a takeover bid by a Singapore-based private company has been pushed back to mid-April, while its own temporary financing is not now forthcoming from a US equity and capital fund.

The Australian project developer of the US Magnolia export plant in Louisiana with an agreement to supply shipments to Vietnam is now likely to be taken over by a Singapore-based private company.

The US Magnolia LNG export project in Louisiana, which recently agreed to supply cargoes to a new terminal in Vietnam planned for the Mekong Delta, has agreed to extend its negotiating time and seek a full sales agreement to be signed by the end of May 2020.

The US Magnolia LNG export project in Louisiana, which recently agreed to supply cargoes to a new terminal in Vietnam planned for the Mekong Delta, has received authorization from the regulators to expand production from 8 million tonnes per annum to 8.8 MTPA.

The Federal Energy Regulatory Commission issued the draft supplemental environmental impact statement concluding that the modifications for the capacity increase, with the additional mitigation measures recommended, would continue to avoid or reduce impacts to less than significant levels.

“There would be no substantive change in construction noise or air emissions from that previously analyzed in the Commission’s EIS for the Magnolia LNG project and modeling demonstrates there would be no exceedances of the National Ambient Air Quality Standards,” said the FERC report.

The FERC set 18 November 2019 as the deadline for receipt of public comments on the capacity increase.

The supplemental final environmental impact statement is then expected to be issued by the FERC on or before 24 January 2020.

The Magnolia LNG project developer is the Australian-listed company LNG Ltd, which in September 2019 signed an agreement to supply the Bac Lieu Province import terminal.

LNG Ltd said it Mangolia LNG, would supply 2 MTPA to Vietnam from its revised 8.8 MTPA of output.

The Louisiana shipments would be on a free-on-board (FOB) basis for a 20-year term with options to extend the term.

The Vietnamese project includes the construction of the import terminal, a 3,200-megawatt combined-cycle power plant and delivery of power generation to Bac Lieu Province.

That venture is expected to commence operations in 2023 pending finalization of anticipated government approvals.

“We thank FERC for their expeditious diligence and review of Magnolia LNG’s production capacity amendment, and we are pleased with the findings,” said LNG Ltd Chief Executive Greg Vesey.

“The increased LNG production would be achieved by an increase in the capacity and pressures of the ammonia refrigerant cycle and the mixed refrigerant cycle,” said the FERC.

“The auxiliary boiler stream production would also be increased to provide more power to the ammonia compressor steam turbine driver. In addition to the liquefaction uprate changes, the gas pre-treatment process would change from a single heavy hydrocarbon removal column to separate de-ethanizer and debutanizer columns,” explained the report.

“An electrically driven overhead booster compressor is proposed as part of the heavy hydrocarbon removal changes,” it added.

“Furthermore, the flare stack would be relocated on the project site, and a separate marine flare added,” stated the regulator.

Australia-listed Liquefied Natural Gas Ltd, and its Magnolia LNG project in the US state of Louisiana, has agreed to supply cargoes to new terminal in Vietnam planned for the Mekong Delta as part of a gas-to-power project.

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.