Liquefied Natural Gas Limited (LNG Ltd) has completed an equity placement of 10 million new shares, at US$ 0.42 per share, to investors in Australia, raising a total of US$ 4.2 million.
The funds raised from the placement will be used to support a US$ 2 million Letter of Credit condition under the agreement with Kinder Morgan Louisiana Pipeline, and to further develop the Magnolia LNG project.
At the end of January, Magnolia LNG signed a legally binding pipeline capacity agreement with Kinder Morgan Louisiana Pipeline. The agreement secured sufficient gas transportation service rights for the full 8 million tpa capacity of the MLNG project, subject to a number of conditions.
Kinder Morgan’s open season process closed on the 7th March, and on the 12th March, the company issued a formal notification to MLNG of the award capacity to Magnolia.
Letter of Credit
One of the requirements under the agreement is that MLNG issue a US$ 2 million Letter of Credit, which guarantees the minimum development costs that Kinder Morgan has, and is expected to, incur under the agreement. This Letter of Credit will remain in place until financial close of the Magnolia LNG project.
Managing director, Maurice Brand, commented: “This capital raising will allow the company to accelerate the Precedent Agreement with Kinder Morgan. The formal award of capacity rights for the supply of gas to MLNG is a critical step in the project progressing through the FERC regulatory process and completion of FID later in the year. We are delighted with the increasing level of support from Australian institutions.”
Adapted from press release by Katie Woodward
Read the article online at: https://www.lngindustry.com/liquid-natural-gas/13032014/lng_limited_completes_equity_placement_282/