LNG

The US export project, Magnolia LNG, and its owners LNG Ltd have been purchased by a London-listed energy infrastructure firm for US$2.25 million from Australian insolvency administrators appointed to oversee asset dispersals.

The Australian-listed developer of the US Magnolia export plant in Louisiana with an agreement to supply cargoes to Vietnam said a Singapore-based private company has withdrawn a planned takeover bid.

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.

Jan 27 (LNGJ) - The US Federal Energy Regulatory Commission has  prepared a final supplemental environmental impact statement for the Magnolia LNG project proposed for Lake Charles in Louisiana, which has a deal to export shipments to Vietnam. The Magnolia project, owned by Australian-listed LNG Ltd, requested authorization to increase capacity at the previously authorized project from 8 million metric tonnes per annum to 8.8 MTPA. 

   “The increased production capacity would be achieved through the optimization of Magnolia LNG’s final design, including additional and modified process equipment,” the FERC noted. “With the incorporation of the mitigation measures identified in the supplemental EIS, staff concluded the LNG terminal design would include acceptable layers of protection or safeguards,” it added.

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.

Australian company Liquefied Natural Gas Limited, developer of the US Magnolia LNG project in Louisiana and the Canadian Bear Head venture in Nova Scotia, has decided at a board meeting to re-domicile to the United States and list on the Nasdaq global exchange.

LNG Ltd said that after the vote by the board the company currently listed on the Australian Securities Exchange would proceed to list on the Nasdaq following regulatory and judicial approvals and an affirmative shareholder vote.

“After continued evaluation by the Board and management team and given the Company’s confidence in raising new capital to fund our business and marketing efforts, we believe a US re-domiciling is in the company’s best interest,” said Paul J. Cavicchi, Chairman.

The Magnolia and Bear Head projects have plans for combined production plans of up to 20 million tonnes per annum, 8 MTPA at Magnolia at Lake Charles and as much as 12 MTPA at Bear Head, proposed for Richmond County in Nova Scotia.

“This listing change is expected to benefit LNGL and its shareholders by properly positioning and valuing the Company for future success,” added Cavicchi.

LNG Ltd, based in Sydney, said it believed the US listing change would increase awareness of the stock among North American investors who are familiar with the LNG industry and have significant capital to deploy to such assets.

The company also expected better valuation and better trading liquidity for the stock, given the current valuations for LNG Ltd’s US-listed peers.

LNG Ltd. additionally forecasts that the change would make the company more attractive to potential future business partners.

The company's assets include the OSMR LNG liquefaction process through its subsidiary LNG Technology Pty Ltd.

“LNGL is committed to transparency and regular communication during the re-domicile process,” said Chief Executive Greg Vesey.

“This will ensure that all shareholders, retail and institutional, Australian, or in the US and elsewhere, are able to make fully informed decisions,” added the CEO.

“At this stage we anticipate that a re-domicile transaction could be completed in late 2019 or early 2020,” stated Vesey.

The re-domiciliation process will utilize a Scheme of Arrangement under the Australian Corporations Act pursuant to which LNG Ltd’s shareholders will exchange their stock for shares in a newly incorporated US company based in the state of Delaware.

“To assist with the transition, the company anticipates using a share sale facility, providing eligible existing shareholders an election to either sell or retain their shareholding in accordance with the Scheme of Arrangement,” said LNG Ltd.

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.

North American LNG plant developer LNG Ltd has put back its final investment decision on the Magnolia export project in Louisiana, citing trade tensions that affected its discussions with potential Chinese customers.