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Magnolia LNG secures US$1.5 billion commitment from Stonepeak

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LNG Industry,

LNG Limited has announced that certain of its wholly-owned subsidiaries have entered into an amended and restated Magnolia LNG equity commitment agreement (ECA) with Stonepeak Partners LP and have updated the associated Magnolia LLC Agreement.

LNG Limited claims that the amended ECA and LLC Agreements replace the existing Stonepeak agreements that were signed in their entirety in October 2013.

Greg Vesey, the Managing Director and Chief Executive Officer of LNG Limited, said: “Stonepeak is a long-term and valued partner in our project, and we are pleased to continue this relationship. This announcement signals a strong message to the LNG industry about our shared confidence in the virtues and advantages of the Magnolia LNG project as we continue our focus on finalising offtake agreements and moving toward a final investment decision (FID).”

Trent Vichie, Stonepeak Co-Founder and Senior Managing Director, added: “We are thrilled to announce our continued support for Magnolia, which we believe to be among the best positioned projects for the next wave of US LNG exports, and to support LNG Limited management in the final steps to a successful Financial Close. Stonepeak is bullish on the long-term outlook for US sourced LNG, which we believe can provide cheaper and cleaner fuels globally to underserved or stranded consumers, and we hope that Stonepeak’s commitment to Magnolia can help bring additional low-cost LNG to market.”

LNG Limited claims that the ECA governs the relationship, cooperation, rights and obligations between Stonepeak and LNG Limited through financial close of Magnolia. The LLC Agreement sets out the respective rights and obligations of both LNG Limited and Stonepeak relating to Magnolia from financial close, including the governance, construction, operation, profit allocation, distribution of post-debt service cash flows, and other related matters.

In the statement, LNG Limited added that the amended and restated agreement represents the definitive documentation under which investment funds managed by Stonepeak will acquire Mandatorily Redeemable Preferred Interests (Preferred Interest) in the Magnolia LNG project. The proceeds will be used to fund the full expected US dollar equivalent equity requirement to build the Magnolia LNG project and put it into service. Stonepeak’s investment is scheduled to close once a positive FID has been taken on Magnolia by LNG Limited, subject to particular conditions precedent, with definitive debt financing agreements thereafter in front of financial close.

LNG Limited’s share of annual cash distributions from Magnolia will be after payment of debt service and the Preferred Interest fixed-return obligation held by Stonepeak. LNG Limited’s equity share of Magnolia’s distributable cash flow is primarily dependent on the project’s final total capital cost (including EPC, Owner’s, and debt financing costs), in addition to the average pricing of the offtake agreements executed for Magnolia’s 8 million tpy of capacity.

The Stonepeak transaction is a Magnolia LNG project level finance transaction that does not affect Bear Head LNG or LNG Limited shareholders’ interest in LNG Limited.

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LNG project news US LNG news LNG export news