LNG Ltd has announced that Magnolia LNG and Meridian LNG Holdings Corp. have agreed to extend the financial close date condition precedent for Magnolia LNG from 30 June 2016 to 31 December 2016.
A legally binding agreement with Meridian was signed on 23 July 2015 for firm capacity rights up to 2 million tpy of LNG at Magnolia LNG. The project is located on the Calcasieu shipping channel in the Lake Charles District, Louisiana, US.
Under the liquefaction tolling agreement (LTA), liquefaction services will be provided by Magnolia to Meridian over the term of the contract. In return, Meridian will provide monthly capacity payments. It is also responsible for the procurement and delivery of feed gas to the LNG plant, and for handling all shipping to transport the LNG to customers from the plant. The key terms of the LTA include the following:
- Initial 20-year term, with the option to extend to 25 years.
- Firm annual LNG capacity of 1.7 million tpy, with a further 0.3 million tpy to be offered at Magnolia’s discretion.
Meridian aims to transport the LNG to the Port Meridian – a Höegh LNG operated floating storage and regasification unit (FSRU), with the gas delivered to E.ON Global Commodities (EGC) under the 20-year gas sales agreement (GSA), which was carried out and announced by Meridian on 23 April 2015. The EGC contract is for 750 million f3/d of LNG for a period of 20 years.
Maurice Brand, the President, CEO and Managing Director of Magnolia LNG, said: “Financial close date for the Magnolia LNG project is dependent on the execution of further binding offtake agreements the timing of which is uncertain due to current market conditions. The extension of time with Meridian LNG provides additional time for Magnolia LNG to finalise additional offtake agreements and allows for a typical timeline to conclude both project equity and debt following the execution of offtake agreements.”
Edited from press release by David Rowlands
Read the article online at: https://www.lngindustry.com/liquefaction/01022016/magnolia-lng-and-meridian-lng-extend-binding-agreement-1948/