Magnolia LNG project update

As announced in November, Liquefied natural Gas Ltd has signed a Tolling Term Sheet with LNG Holdings Corp. The Term Sheet provides for a proposed 20 year tolling agreement, covering firm LNG production capacity of 1.7 million tpa. Under the proposed Tolling Agreement, LNG Holdings will be responsible for delivery of gas to the Magnoila LNG (MLNG) project for liquefaction, storage, and delivery onto LNG ships arranged or designated by LNG Holdings. In consideration of MLNG’s provision of the tolling services, LNG Holdings will pay a fixed monthly capacity fee to MLNG, over the 20 year tolling term, and other fees in relation to the MLNG Project’s fixed and variable operating and maintenance costs.

Based on the terms of an existing Tolling Term Sheet and Tolling Heads of Agreement, MLNG has now issued draft definitive Tolling Agreements to Brightshore Overseas Ltd (a member of the Gunvor Group), for firm LNG production capacity of 1.7 mtpa and Gas Natural SDG S.A (a member of the Gas Natural Fenosa Group), for firm LNG production capacity of up to 1.7 mtpa. Negotiations are continuing with a number of other parties to secure tolling arrangements for the MLNG Project’s remaining LNG production capacity.

New project advisory body

On the 13 December 2013, the Company announced MLNG’s appointment of BNP Paribas as Project Finance Advisor. MLNG is in the finals stages of selecting its preferred engineering, procurement and construction contractor, and agreeing the terms of a definitive Precedent Agreement for the transportation of gas to the MLNG Project. Responsibility for the supply and transportation of gas will be assumed by the tolling parties on the execution of definitive Tolling Agreement; Following the October 2013 execution of a definitive Equity Commitment Agreement between MLNG and Stonepeak Partners LP (Stonepeak), Trent Vichie, Managing Director and co-founder of Stonepeak has joined the Board of MLNG. The parties are now working closely together on all aspects of the MLNG project, to a targeted financial close in the first half of 2015. MLNG is on track to open its local project office.

Adapted from press release by Ted Monroe

Read the article online at: https://www.lngindustry.com/liquid-natural-gas/16122013/monthly_magnolia_lng_project_update/