Following execution of a Letter of Intent (LOI) by EXMAR with LNG Partners, LLC and LNG BargeCo BVBA for the long-term charter of a floating liquefaction and storage unit (FLSU) to serve the BC LNG Project near Kitimat, British Columbia, Canada, EXMAR and LNG Partners announced today that they have taken a number of additional steps to solidify their alliance.
As a focal point for the alliance, the two companies have invested in a joint venture company appropriately named Marching Prospect Limited. The new company will acquire interests in the BC LNG Project upstream of the FSLU.
In addition, EXMAR has made a loan of $50,000,000 (CAD) to finance a nonrefundable deposit for construction of the FSLU. This nonrefundable deposit enabled the project to meet a deadline set by Pacific Northern Gas Ltd. (PNG); if the deadline had not been met or extended, this would have resulted in the project’s key Gas Transportation Service Agreement (GTSA) to have been terminated and would have allowed PNG to withdraw the full amount of the cash collateral which had previously been placed into escrow as liquidated damages for termination of the GTSA. The $50,000,000 (CAD) is the largest amount dedicated to the project by any participant to date.
LNG Partners has also granted EXMAR the option to purchase 50% of the LNG cargos to be produced by the FSLU and EXMAR has granted LNG Partners as well as the other parties currently involved with the project an option to acquire an interest in the FSLU. Various aspects of the alliance are subject to the approval of third parties, including the BC LNG Project Steering Committee of which LNG Partners is a voting member, and to the execution of the definitive charter for the FSLU.