Liquified Natural Gas Limited decided not to further go forward with the offtake partner Meridian LNG on Liquefaction Tolling Agreement relating to Magnolia LNG facility.
On 22 July 2015, LNG’s 100% owned project company Magnolia LNG LLC and Meridian LNG Holdings Corp entered into an agreement for up to 2 mtpa capacity rights. The liquefication services were contracted through a Liquefaction Tolling Agreement under which Meridian LNG had the right to process natural gas into LNG at Magnolia’s LNG export terminal. Since the signing of this agreement, both the parties have extended the contract for a total six times. But now both, Magnolia and Meridian, have mutually agreed not to continue with the agreement from the next year.
Liquified Natural Gas Limited (ASX: LNG) through its wholly owned Perth based subsidiary Magnolia has agreed with Meridian LNG not to extend the current deadline of 31 December 2018, fixed for the satisfaction of pre-requisite conditions.
LNG Limited’s Managing Director and Chief Executive Officer stated that the decision to not continue with Meridian agreement has allowed the company to free up desired capacity from Magnolia LNG. He added that this capacity could be utilized with other offtake partners who are more closely aligned with Magnolia’s development needs.
Further, in a separate release to Australian Securities Exchange, LNG Limited announced the extension of its existing EPC contract with engineering group KSJV, a 50:50 joint venture between scee and Kentech. LNG Limited stated that its current binding engineering, procurement, and construction contract with KSJV has now been extended to June 30, 2019.
This agreement was initially signed on 16 November 2015 which includes a binding lump sum turnkey (LSTK) of US$4.354 billion. Moreover, the installed capacity of EPC contract on cost per tonne basis ranges between US$495 and US$495, further depending on the final design at Final Investment Decision (FID). As LNG Limited wheels the Final Investment decision, the company commits to take rigorous marketing activities to promote Magnolia globally.
Further, the company confirmed the potential of Magnolia LNG to lead the next generation of U.S. LNG export projects. These projects are reportedly construction-ready with FERC notice to proceed. Approval from U.S. Department of Energy non-FTA and FTA export, LSTK EPC contract and equity financing has also been secured.
In today’s trading session, LNG Limited stock edged up by 2.128% to last trade at $0.480 on 21 December 2018. Moreover, the stock has also witnessed the positive market sentiments over the past one year with a daily price change of +11.90%.