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Magnolia LNG on track to submit FERC application

LNG Industry,

Magnolia LNG has announced that it is on schedule to submit its application to the US Federal Energy Regulatory Commission (FERC) for the 8 million tpa Magnolia liquefied natural gas project in Louisiana.

Since the company’s last update, a number of significant milestones have been completed:

Kinder Morgan Pipeline

  • Magnolia LNG (MLNG) executed a legally binding pipeline capacity agreement with Kinder Morgan.
  • The agreement secures sufficient firm gas transportation service rights from the full 8 million tpa capacity of the MLNG project.
  • The Kinder Morgan Louisiana Pipeline interconnects with six major gas pipelines and traverses the Magnolia LNG site.

EPC contract with SKEC Group

  • MLNG signed a MoU with SK Engineering and Construction and its subsidiary SK E&C USA (SKEC Group).
  • SKEC Group was named as the engineering, procurement and construction contractor (EPC) for the Magnolia LNG project.
  • Under the MoU the companies will negotiate a Technical Services Agreement, which will include:
    • Review all resource reports submitted to the FERC and assist MLNG to complete the FERC filing process;
    • Complete sufficient Front End Engineering Design (FEED) and open book cost estimating activities;
    • Negotiate all commercial terms, including compensation to MLNG by way of liquidated damages for late completion and LNG plant performance non-compliance.
  • The SKEC Group has already completed a detailed review of MLNG’s OSMR® process technology, which will be used in the LNG project.
  • As a result, subject to final FEED verification, each LNG train will have a design capacity of a minimum of 2 million tpa and a SKEC guaranteed capacity of 1.7 million tpa.
  • The SKEC Group has also provided MLNG with an initial estimate of the capital costs of US$ 1.57 billion, which was consistent with their budget estimate.
  • This estimate is for the EPC contract portion of the MLNG project for the initial phase of two LNG trains, including gas treatment facilities, two 160 000 m3 storage tanks, jetty/ship loading facilities and related infrastructure for the full project.

MLNG office in Lake Charles

  • MLNG opened its local project office in Lake Charles, Louisiana, in January 2014.
  • The office is located approximately 10 miles from the MLNG site.
  • The office will provide:
    • A focal point for the local community to be informed of progress on the project;
    • Management of all stakeholder relationships, in conjunction with the company’s Houston office;
    • Coordination of services and logistics for all local project activities.

Adapted from press release by Katie Woodward

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