Perth-based Liquefied Natural Gas Ltd (LNGL) announced that its 100% owned project company, Magnolia LNG, and Meridian LNG Holdings have agreed to extend the financial close date condition precedent for Magnolia LNG from 30 June 2016 to 31 December 2016.
Last year, the company announced the signing of a legally binding agreement with Meridian LNG for firm capacity rights for up to 2 million tonnes per annum (mtpa) at Magnolia LNG, located in the Calcasieu shipping channel in the Lake Charles District, State of Louisiana, USA.
LNGL said that under the liquefaction tolling agreement (LTA) Magnolia will provide liquefaction services to 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.
The LTA is for an initial term of 20 years, with option to extend by a further 5 years, and for firm annual capacity of 1,7 mtpa with a further 0.3 mtpa to be offered at Magnolia’s discretion.
“Financial close date for the Magnolia LNG project is dependent on the execution of further binding offtake agreements the timing of which is uncertain die to current market conditions,” said LNGL Managing Director/CEO and President of Magnolia LNG, Maurice Brand.
“The extension of time with Meridian LNG provides additional time for Magnolia LNG to finalise additional offtake agreements and allows for a typical timeline to conclude both project equity and debt following the execution of offtake agreement.”
Meridian LNG plans to deliver the LNG to Port Meridian, its Hoegh LNG operated floating re-gasification terminal in the UK with the gas delivered to E.ON Global Commodities under the 20-year gas sales agreement executed and announced by the company on 23 April 2015.