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Magnolia LNG signs EPC with KBR and SKE&C

LNG Industry,

LNG Limited has advised that its subsidiary, Magnolia LNG LLC, has signed a Memorandum of Understanding (MoU) with Kellogg Brown & Root LLC (a subsidiary of KBR, Inc.) and SKE&C USA, Inc., under which KBR and SKEC propose to execute a joint venture agreement (JVA) to deliver the 8 million tpy Magnolia LNG project.

The MoU follows the signing of a technical services agreement with SKEC in March 2014 and a subsequent technical services agreement with KBR, which was announced on 5 January 2015.

EPC contract

Under these agreements, the parties will complete all due diligence in relation to technical commercial and contractual matters that will enable the EPC JV to execute a lump sum, turnkey engineering, procurement, construction, commissioning, start-up and performance testing EPC contract for the LNG plant.

Magnolia LNG has set the following schedule for the project:

  • JV agreement between KBR and SKEC – February 2015
  • Initialling EPC contract between Magnolia LNG and the JV – 31 March 2015
  • EPC contract signing – April 2015

SKEC has already initialled the EPC contract, which incorporates all requirements laid out by various project participants. Magnolia LNG does not expect any material changes to this EPC contract.


Commenting on the milestone, CEO Maurice Brand said: “the execution of the MoU with KBR and SKEC was a further positive step towards the formation of the EPC JV that will provide the ‘EPC wrap’ that is required by both project lenders and equity participants.

“The EPC JV structure is common in the LNG industry with each participant able to provide their experience and expertise. KBR is a well-credentialed LNG EPC contractor and will provide the Project Director and access to the full global resources of the KBR group. This will be particularly relevant as Magnolia LNG moves to commit to the full 8 million tpy.”

FERC comments

Magnolia LNG’s COO, John Baguely added: “Our MLNG team look forward to working with KBR in their joint venture with SKEC as Magnolia LNG advances towards a final EPC contract and our planned financial close in mid-2015. During the period through to financial close we will be working to incorporate any comments received from FERC during their preparation of the draft environmental impact statement, and to undertake the necessary rigorous planning and scheduling required to support achieving first LNG in the fourth quarter of 2018.”

Adapted from press release by Katie Woodward

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