Magnolia LNG Project Tolling Agreement Update - Meridian LNG
Perth, April 24, 2015 AEST (ABN Newswire) - The Directors of Liquefied Natural Gas Limited (
ASX:LNG) (LNGLY:OTCMKTS) are pleased to advise that its 100% owned project company, Magnolia LNG, LLC (Magnolia), has been notified by Meridian LNG Holdings Corp. (Meridian LNG) that Meridian LNG intends to progress the 20-year liquefaction tolling agreement (LTA) with Magnolia, now that Meridian LNG has executed a 20-year gas sales agreement (GSA) with E.On Global Commodities SE (a wholly owned company of E.On (www.eon.com).
Please see the attached Press Release from E.ON. in link below.
Magnolia and Meridian LNG have substantially completed the negotiation of a LTA, agreeing key commercial terms and will now move forward to complete binding agreements for a total of 2 million ton per annum (mtpa). The Company will announce the LTA terms upon execution of the binding contract.
Under the proposed LTA, Meridian LNG will be responsible for delivery of gas to Magnolia for liquefaction, plant usage, storage, and delivery onto LNG ships arranged by Meridian. Magnolia will be paid monthly capacity fees over the 20-year tolling term.
Meridian LNG, together with its operating partner Höegh LNG, will deliver LNG from Magnolia to the Port Meridian LNG import terminal in the UK, as well as potentially to other destinations compatible with Höegh's Floating Storage and Regasification Units (FSRU) vessels. Meridian LNG will deliver re-gasified LNG to E.On Commodities on the UK NTS (National Transmission System) pursuant to the GSA.
See the attached map showing the LNG and gas supply chain in link below.
Magnolia's Chief Commercial Officer, Mr. Rick Cape, said, "We congratulate Meridian LNG on the signing of its Gas Sales Agreement with E.On and look forward to concluding negotiations and execution of the Meridian LTA."
"We are also pleased with the progress being made on additional tolling agreements, and LNG sales and purchase agreements and are confident we will close out the full 8 mtpa of Magnolia LNG production capacity," said Mr. Cape.
By way of background, on 26 November 2013, Magnolia and Meridian LNG announced that they had entered into a 20-year tolling agreement term sheet (with a five year option) for firm LNG production capacity of 1.7 mtpa with a possible further 300,000 mtpa under preferred conditions. Since that time both parties have progressed development of their respective projects, culminating in this status update.
ABOUT MAGNOLIA LNG:
The Magnolia LNG Project is 100% owned by Magnolia LNG LLC, which is a wholly owned subsidiary of Liquefied Natural Gas Limited. The project comprises the proposed development of an 8-mtpa LNG project on a 115-acre site, located on an established LNG shipping channel in the Lake Charles District, State of Louisiana, United States of America. The project is based on the development of four x 2 mtpa LNG production trains using the Company's wholly owned OSMR(R) LNG process technology.
Magnolia LNG's business model provides liquefaction services to LNG buyers who pay a monthly fixed capacity fee, plus all LNG plant operating and maintenance costs. LNG buyers contract for liquefaction services under two contract models - a Liquefaction Tolling Agreement, whereby the LNG export terminal is only responsible for processing natural gas into LNG, and an LNG Sales and Purchase Agreement under which the customer buys LNG on a free on board basis (FOB).
PORT MERIDIAN
Port Meridian will consist of a floating storage and regasification unit (FSRU), a subsea pipeline, and onshore facilities connecting into the UK National Transmission System. All major construction permits and planning approvals for Port Meridian have been obtained. Gas deliveries are expected to commence in 2019 subject to Ofgem granting a third party access exemption to Port Meridian and Meridian LNG.
For more information, please visit www.portmeridian.com HÖEGH JDA Meridian LNG, through a Joint Development Agreement (JDA) with Höegh LNG, will ship LNG to Port Meridian using a combination of traditional LNG carriers as well as the FSRU. Höegh will act as the supplier and operator of the FSRU and carriers (collectively the "Vessels") and under an option agreement included in the Joint Development Agreement would retain a 51% interest in the Vessels with Meridian LNG owning the remaining 49%, should Meridian choose to exercise that option.
For more information on Höegh LNG, please visit www.hoeghlng.com
MERIDIAN LNG
Meridian LNG is a wholly owned portfolio company of a fund advised by West Face Capital Inc., one of Canada's leading alternative investment manager. Meridian LNG is focused on the development of Port Meridian as well as its co-ownership of Vessels with Höegh LNG under the Höegh JDA. Meridian LNG also has plans to build an LNG import terminal located offshore Long Island, NY (www.portambrose.com) to address seasonal or peak natural gas demand.
For further information, please contact: info@meridianlng.com.
E.ON GLOBAL COMMODITIES
E.ON Global Commodities (EGC) is the energy trading arm of E.ON, one of the world's largest investor-owned power and gas companies. As the commercial hub for E.ON to the international wholesale markets, it sources, stores, transports, markets and trades energy commodities on a global scale. The company also owns and operates a pipeline infrastructure business, which supports gas supply and trading activities, and an unbundled gas storage business. EGC is involved in regasification terminals across Europe and has booked 1.7 billion cubic meters (bcm) per year of long-term capacity at the Grain LNG Terminal in the UK and 3 bcm per year of long-term capacity at the Gate Terminal in the Netherlands. Further, EGC has access to Spanish regasification capacity in Huelva and Barcelona.
For more information, please visit www.eon.com
To view the figures, and additional release, please visit:
http://media.abnnewswire.net/media/en/docs/ASX-LNG-716716.pdf
About Liquefied Natural Gas Ltd
Liquefied Natural Gas Limited (
ASX:LNG) (OTCMKTS:LNGLY) (LNGL) is an ASX listed company whose portfolio consists of 100% ownership of the following companies:
- Magnolia LNG, LLC (Magnolia LNG), a US-based subsidiary, which is developing an eight mtpa or greater LNG export terminal, in the Port of Lake Charles, Louisiana, USA;
- Bear Head LNG Corporation Inc. (Bear Head LNG), a Canadian-based subsidiary, which is developing an 8 – 12 mtpa LNG export terminal in Richmond County, Nova Scotia, Canada with potential for further expansion;
- Bear Paw Pipeline Corporation Inc. (Bear Paw), which is proposing to construct and operate a 62.5 km gas pipeline lateral to connect gas supply to Bear Head LNG; and
- LNG Technology Pty Ltd, a subsidiary which owns and develops the Company's OSMR® LNG liquefaction process, a midscale LNG business model that plans to deliver lower capital and operating costs, faster construction, and improved efficiency, relative to larger traditional LNG projects.
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