Liquefied Natural Gas Limited (LNG Ltd) has announced that its 100% owned subsidiary, Gladstone LNG Pty Ltd, has reached an agreement with the Gladstone Ports Corp. to extend the lease of its Fisherman’s Landing LNG Project (FFLNG) site until 31 March 2015. LNG Ltd also has the option to extend the lease until 31 March 2016.
LNG Ltd has also signed a non-binding memorandum of intent (MOI) for a proposed gas sales agreement (GSA) with Tri-Star Petroleum Company (Tri-Star).
This MOI will involve FFLNG processing Tri-Star’s gas reserves to produce 1.5 million tpa of LNG over a 20 year term. This would support FLLNG’s development to proceed with the first LNG train of 1.5 million tpa.
LNG Ltd also confirmed that it has commenced discussions with a number of LNG buyers for supply of the potential 1.5 milllion tpa of LNG from the first train to the Asian market. The proposed commercial agreements will incorporate a tolling agreement with the LNG Ltd and a GSA with Tri-Star.
LNG Ltd plans to apply a similar tolling business model for FLLNG to that applied for its Magnolia LNG and Bear Head LNG projects in North America. Under this model, LNG Ltd takes no commodity risk and receives a fee to provide all liquefaction and LNG storage services. This model allows the company to receive a monthly fee, typically over a 20 year term, with the toiler contractually responsible for supply and transport of the gas to the FLLNG plant, as well as for LNG sales and transport to LNG buyers.
LNG Ltd’s Managing Director, Maurice Brand, said: "The Variation to the Agreement for Lease with Gladstone Ports Corporation and MOI with Tri-Star are major steps towards recommencing the development of FLLNG".
Adapted from press release by Callum O'Reilly
Read the article online at: https://www.lngindustry.com/liquefaction/31102014/lng-ltd-extends-its-gladstone-lease-1706/