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Liquefied Natural Gas Limited on track to submit application to FERC for full filing status

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Liquefied Natural Gas Limited (ASX: LNG) remains on schedule to submit in March/April 2014 its Magnolia LNG project application to the U.S. Federal Energy Regulatory Commission (FERC) for the granting of full filing status.

The company has submitted the January 2014 Monthly Progress Report as required under FERC regulations.

Milestones

MLNG has recently completed three significant milestones including:

-    Executing a legally binding pipeline capacity agreement with Kinder Morgan Louisiana Pipeline that secured firm gas transportation service rights for the full 8 million tonne per annum of LNG capacity. In accordance with the PA, KMLP commenced the Open Season process on 14 February 2014. The Open Season is expected to remain open for 3 to 4 weeks, with formal award of capacity to MLNG scheduled for the end of March 2014;
-    Executing a Memorandum of Understanding with SK Engineering and Construction relating to the preferred engagement of the SKEC Group as the engineering, procurement and construction contractor; and
-    Opening its local project office in Lake Charles, Louisiana.

Mangolia LNG

SKEC has made a US$1.57 billion capital estimate for the EPC contract portion of the MLNG Project for the initial phase of 2 LNG Trains – with total production capacity of 4Mtpa of LNG, gas treatment facilities, two 160,000 square metre storage tanks, jetty/ship loading facilities and related infrastructure for the full 8Mtpa LNG Project.

MLNG is planned as a 8Mtpa liquefied natural gas export project comprising of four liquefaction trains located at the port of Lake Charles, Louisiana, that is fast-tracked for a robust Final Investment Decision in mid-2015.

This will use 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.

Stonepeak Partners is earning an estimated 50% stake in MLNG return for contributing the full US$660 million project equity requirement.

This represents 30% of the total capital costs with LNG Limited planning to finance the remaining 70% with project debt.

To that end, the company has appointed BNP Paribas Bank as its project finance advisor.

It will also work with Stonepeak and New York based EAS Advisors, which had been instrumental in LNG lining up funding and partners for the project, to secure the proposed project debt financing for the Stage 1 development.

A Tolling Term Sheet for up to 2Mtpa has been signed with Guvnor along with a Heads of Agreement with GasNatural that effectively underpins the base case for the project. In addition, a 2Mtpa Tolling Term Sheet has been signed with LNG Holdings.

 

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Quick facts: Liquefied Natural Gas Ltd

Price: 0.205 AUD

ASX:LNG
Market: ASX
Market Cap: $118.2 m
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