Liquefied Natural Gas Limited Secures Expansion Approval For Magnolia Project From The U.S. Department Of Energy

  • Mar 25, 2019 AEDT
  • Team Kalkine
Liquefied Natural Gas Limited Secures Expansion Approval For Magnolia Project From The U.S. Department Of Energy

Liquefied Natural Gas Limited (ASX: LNG) announced that the company has received the authorization from the U.S. Department of Energy (DOE) for its wholly owned subsidiary, Magnolia LNG LLC to expand its export capacity to 8.8 million tonnes per annum. The U.S. Department of Energy allowed the company’s subsidiary to expand the export to the countries that have Free trade agreement (FTA) with the United States.

The recent approval by the DOE will mark a 0.8mtpa increase from its initial approval. The company secured the initial approval of the export from the U.S. Department of Energy on 26th February 2013, which allowed the company’s subsidiary (Magnolia) to export up to 4 million tonnes per annum (mtpa) of LNG to the free trade agreement countries.

The approval of DOE on the project is valid up to 25 years, starting on the earlier of the date of first export or ten years from the date of the initial approval, which was secured on 26th February 2013.

The company’s subsidiary Magnolia secured an approval (non-FTA approval) for exporting LNG to the countries, which does not have a free trade agreement with the United States of America, on 30th November 2016.

Recently, the company released its quarterly activity report for the period ended 31st December 2018.

Project Update:

The project is fully permitted and also includes the LSTK EPC contract that that is enough to bring the facility into a production operation. Magnolia project has the FERC order of both FTA and non-FTA approval from the U.S. Department of Energy.

LNG Limited also presented an update recently on the LNG supplies for Asian Markets (LNGA) 2019, in which the company mentioned that it has secured regulatory approvals for the Magnolia project. As per the company, the production capacity of four trains even exceeds 2.2mtpa as these trains use the company’s patented OSMR LNG process technology.

As per the company, its indigenous LNG processing technology is the lowest full-cycle cost technology and is highly reliable and energy sufficient. The OSMR technology only consumes 6-8% of feed gas and the ammonia used in the technology is endorsed by Greenpeace.

Environmental Assessment:

The company won the IchemE award for its magnolia plant efficiency and due to the high plant efficiency, the magnolia project generates much fewer emissions as compared to its peer projects. As per the company, Magnolia smaller footprints consumes significantly less land area as compared to its peer project. The Magnolia site is of 115 acres only with 13.06 acres per mtpa production.

During the time of writing this report, the shares of the company closed at A$0.465 (as on 25th March 2019, 04:40 PM), flat as compared to its previous close. The stock has offered a negative YTD return of 9.71% to its investors till date. The company has a market capitalization of A$265.89 million with 571.81 million outstanding shares.


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