LNG Ltd to acquire Bear Head LNG

Liquefied Natural Gas Limited (LNG Ltd) has signed an agreement to acquire 100% of Bear Head LNG Corp. from a subsidiary of Anadarko Petroleum Corp. (Anadarko) for US$ 11 million.

The Bear Head LNG Project is located in Richmond County, Nova Scotia, Canada. As part of the deal, LNG Ltd will acquire a 255-acre site comprising industrial-zoned land (180 acres) and deep-water acreage (75 acres), as well as foundations in place for two 180 000 m³ LNG tanks. It also includes the project rights of the previously proposed LNG import terminal.

The acquisition is in line with LNG Ltd’s strategy of acquiring sites in North America where the company can replicate its Magnolia LNG Project and fast-track development by using its existing LNG Ltd development team and its OSMR^® technology.

Aerial view of the Bear Head LNG project site.

LNG export facility

LNG Ltd plans to make the Bear Head LNG Project a 4 million tpa LNG export facility, with potential for future expansion.

LNG Ltd has already developed a gas supply plan and a transportation plan, and has interest from several parties to enter into Tolling Agreements, adopting the same business model as the Magnolia LNG Project. The company is also in discussions with gas transportation companies and owners of gas reserves regarding the supply of natural gas from onshore and offshore Canadian natural gas supply options, and the Marcellus Shale Gas Play in North-Eastern USA, to the Bear Head LNG project site.

Once the transaction has been completed (the transaction close is expected on or before 31 August 2014), LNG Ltd will appoint John Godbold as Chief Operating Officer and Project Director of Bear Head LNG Corp. Ian Salmon will also be appointed Chief Financial Officer and Chief Commercial Officer.

Schematic site layout for the proposed Bear Head LNG export project.

Significant transaction

LNG Ltd’s Managing Director, Maurice Brand, said: "This is a significant transaction for LNG Limited and is consistent with our strategic plan to selectively secure sites that meet our criteria and develop a strong North American presence. Importantly, Bear Head LNG will further de-risk the company's asset base.

"We are particularly keen to secure opportunities where we can either replicate Magnolia LNG or substantially use all the Company's technical, engineering, technology and development expertise. Bear Head fits those criteria with the development plan based on the use of the Company's OSMR® LNG Process Technology which will deliver lower capital costs, improved energy efficiency and a shorter development and construction schedule.

"Bear Head has considerable unlocked value and sunk costs that can readily be transformed into an LNG export facility. We are looking forward to working with local governments in developing this project that will have significant local economic benefits.

"We have been undertaking due diligence on Bear Head since October 2013 so we are confident that we can hit the ground running and obtain all permits and approvals by mid-2015, and during 2016, make a Final Investment Decision.

“With the appointment of John and Ian and several other key managers to follow, we are well resourced to progress our second North American LNG export project in a timely manner. Bear Head LNG will share an office in Houston with Magnolia LNG,”

Magnolia LNG

In a statement released on its website, LNG Ltd also confirmed that Magnolia LNG remains on schedule and budget. The Board of Directors is also satisfied that the acquisition and development of Bear Head will not detract from the Company achieving Financial Close of Magnolia LNG in mid-2015.

Adapted from press release by Callum O'Reilly

Read the article online at: https://www.lngindustry.com/liquefaction/28072014/lng-ltd-to-acquire-bear-head-lng-1077/