Magnolia Inks deal with Meridian
Liquefied Natural Gas Ltd informed that its 100% owned project company, Magnolia LNG, LLC signed a legally binding agreement with Meridian LNG Holdings Corp for firm capacity rights for up to 2 million tonnes per annum (mtpa) at Magnolia LNG, located on the Calcasieu shipping channel in the Lake Charles District, State of Louisiana, USA.
Under the liquefaction tolling agreement (LTA), Magnolia will provide liquefaction servicesto Meridian LNG over the term of the contract in return for monthly capacity payments. Meridian LNG is responsible for procurement and delivery of feed gas to the liquefaction plant and for arranging all LNG shipping required to transport the LNG from the liquefaction plant to its customers.
Meridian LNG intends to deliver the LNG to Port Meridian, its Höegh LNG operated floating re‐gasification terminal in the UK with the gas delivered to E.ON Global Commodities (EGC) under the 20‐year gas sales agreement (GSA) executed and announced by Meridian LNG on 23 April 2015.
Key terms of the LTA include:
Initial term of 20 years, with option to extend by a further 5 years;
Firm annual capacity of 1.7 mtpa with a further 0.3 mtpa to be offered at Magnolia’s discretion; and Conditions precedent, including that Magnolia achieves financial close no later than 30 June 2016.
“We have been working with Meridian LNG since late 2013 and are delighted to have completed our first binding liquefaction tolling agreement. This is another significant milestone for Magnolia toward fully subscribing our 8 mtpa project,” said Magnolia LNG Chief Commercial Officer, Rick Cape.
“Meridian LNG is very pleased to complete our LTA with Magnolia and looks forward to participating alongside other off‐take participants in this impressive and innovative LNG export project. This agreement marks a critical step towards fulfilling our commitment to deliver up to 750 million standard cubic feet a day of natural gasto E.ON Global Commodities, for 20 yearsfrom 2019, via our UK Port Meridian terminal”, said Roger Whelan, CEO Meridian LNG.
LNGL Managing Director/CEO and President of Magnolia LNG, Maurice Brand said, “Financial close for the Magnolia project is planned for first quarter 2016. The Magnolia project remains on schedule to provide first LNG in December 2018 with full LNG supply of 8 mtpa completed in 2019.”
To this end, Mr. Brand further stated, “In light of market interest in the Magnolia LNG project, we have asked the KBR‐SK Joint Venture (KSJV) to provide a fixed‐price turnkey EPC contract price on the full 8 mtpa project, rather than just the original Phase I project of 4 mtpa. The KSJV pricing will be firm for a six‐month period from signing, aligning with our targeted first quarter 2016 financial close. Our marketing efforts continue to progress and shareholdersshould expect an update regarding status of other binding contracts to coincide with the KSJV EPC announcement and/or later in the last quarter of 2015.”