Liquefied Natural Gas Limited (ASX:LNG) has submitted a further response to the Federal Environmental Regulatory Commission’s (FERC) Engineering Data request for its Magnolia Liquefied Natural Gas export project in Louisiana.
The project remains on track to achieve financial close in mid-2015 and first LNG in 2018.
LNG has provided information covering additional geotechnical‐seismic items.
These information requests are consistent with the normal process for applications filed under Sections 3 and 7 of the Natural Gas Act for LNG terminals and interstate pipelines in the U.S.
Managing director Maurice Brand said the Magnolia LNG team has been advised that a further two requests will be made shortly and that solid progress was being made to finalise the FERC Filing process and the targeted issue of a Notice of Schedule in early 2015.
“The FERC process continues to run in parallel with the Company moving towards a bankable EPC contract and long term Tolling Agreements,” he added.
“Magnolia LNG is well placed to achieve its primary goal to achieve Financial Close in mid‐2015 and first LNG in 2018.”
Magnolia LNG
Magnolia LNG, located along the Calcasieu River near Lake Charles, is planned as a 8 million tonne per annum (Mtpa) liquefied natural gas export project comprising of four liquefaction trains, each capable of producing up to 2Mtpa of LNG (1.7Mtpa firm).
This will use LNG Limited’s OSMR® LNG process technology with the company adopting a tolling business model whereby Magnolia LNG will provide liquefaction, storage and ship loading facilities to LNG buyers who pay a monthly fixed capacity fee, plus all LNG plant operating and maintenance costs.
The LNG buyers are also responsible for the supply and transportation of gas to the project site.
LNG Limited has tolling agreements covering 7Mtpa of the project’s planned 8Mtpa capacity and is currently focused on converting the first 4Mtpa to binding status in the first half of 2014.
Earlier this month, it signed a technical services agreement with global LNG engineering, procurement and construction contractor KBR Inc (NYSE:KBR).
It is proposed that KBR and South Korea’s SK Engineering and Construction Group will form an integrated EPC joint venture to deliver the 8 million tonne per annum Magnolia LNG project.
An updated EPC contract has been initialled with SKEC and Magnolia LNG remains on schedule for financial close in mid-2015 and first LNG in the fourth quarter of 2018.
Total capital costs are estimated at US$3.5 billion, or US$440 per tonne, for the 8Mtpa project while cost for the initial 4Mtpa project is estimated at US$1.986 billion.
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