Liquefied Natural Gas Ltd (LNG Ltd) has announced that its 100% owned project company, Magnolia LNG LLC (Magnolia), has signed a liquefaction tolling agreement (LTA) with Meridian LNG Holdings Corp. for firm capacity rights for up to 2 million tpy at Magnolia LNG.
Under the LTA, Magnolia will provide liquefaction services to Meridian LNG over the term of the contract in return for monthly capacity payments. Meridian LNG is responsible for procurement and delivery of feed gas to the liquefaction plant and for arranging all LNG shipping required to transport the LNG from the liquefaction plant to its customers.
Meridian LNG intends to deliver the LNG to Port Meridian, its Höegh LNG operated floating regasification terminal in the UK, with the gas delivered to E.ON Global Commodities (EGC) under the 20-year gas sales agreement (GSA) executed and announced by Meridian LNG in April 2015.
The LTA includes an initial term of 20 years, with the option to extend by a further 5 years. It has a firm capacity of 1.7 million tpy with a further 0.3 million tpy to be offered at Magnolia's discretion.
Magnolia LNG Chief Commercial Officer, Rick Cape, said: "We have been working with Meridian LNG since late 2013 and are delighted to have completed our first binding liquefaction tolling agreement.”
Roger Whelan, CEO Meridian LNG, commented: "Meridian LNG is very pleased to complete our LTA with Magnolia and looks forward to participating alongside other off-take participants in this impressive and innovative LNG export project. This agreement marks a critical step towards fulfilling our commitment to deliver up to 750 million [standard ft3/d] of natural gas to E.ON Global Commodities, for 20 years from 2019, via our UK Port Meridian terminal."
LNG Ltd Managing Director/CEO and President of Magnolia LNG, Maurice Brand, added: "Financial close for the Magnolia project is planned for first quarter 2016. The Magnolia project remains on schedule to provide first LNG in December 2018 with full LNG supply of 8 [million tpy] completed in 2019 […] In light of market interest in the Magnolia LNG project, we have asked the KBR-SK Joint Venture (KSJV) to provide a fixed-price turnkey EPC contract price on the full 8 [million tpy] project, rather than just the original Phase I project of 4 [million tpy]. The KSJV pricing will be firm for a six-month period from signing, aligning with our targeted first quarter 2016 financial close. Our marketing efforts continue to progress and shareholders should expect an update regarding status of other binding contracts to coincide with the KSJV EPC announcement and/or later in the last quarter of 2015."
Edited from press release by Callum O'Reilly
Read the article online at: https://www.lngindustry.com/liquefaction/23072015/magnolia-lng-signs-lta-with-meridian-lng-1055/