THE US Federal Energy Regulatory Commission has accepted an application filed by Magnolia LNG, the Louisiana-focused subsidiary of Australia’s Liquefied Natural Gas Ltd.
LNG said the approval was a crucial step toward securing the permitting and approval necessary for construction of the project, ahead of a scheduled final investment decision in late 2014.
Company managing director Maurice Brand said Magnolia LNG anticipated receiving all approvals during 2015.
“Construction will commence shortly thereafter with first LNG exports planned for the second half of 2018,” he said.
The Magnolia project is located along the Calcasieu River, near Lake Charles, in Louisiana.
The news came after LNG raised A$49.5 million through a share placement to fully fund the Magnolia project to its financial close of mid-2015.
The placement, of 90 million ordinary shares at 55 cents each, was made in two tranches, with 80% of the shares taken up by cornerstone US Institutional Investors.
“The company plans to use some US$30 million to fully fund Magnolia through to 30 June 2015 with the balance of funds to be used for LNGL working capital including the identification of other LNG opportunities,” Mr Brand said.
“With this funding in place the team is now fully focused on delivering the EPC contract and entering into binding Liquefaction Tolling Agreements,” he said.
Merlin Advisors will act as the lender’s engineer for the project, while the American arm of Korea’s SK Engineering and Construction (SKEC) will provide ongoing engineering, procurement and construction (EPC) services for the Magnolia project.
This will include the preparation of a detailed lump sum turn‐key EPC cost estimate on an open book basis by 28 November 2014, LNG said.
SKEC will also conduct an ongoing review of the pre‐front end engineering design (FEED) information and data, helping Magnolia complete the final Resource Reports as part of its filing application to the Federal Energy Regulatory Commission (FERC), due to take place by the end of April.
The company will also complete the FEED for the project, including gas pre‐treatment facilities, four LNG trains (each with nominal LNG production capacity of 2 million tonnes per year), two 160,000 cubic metre full containment storage tanks, jetty and ship loader facilities and related infrastructure and services.
A budget estimate of US1.57 billion for the project provided by SKEC was in line with LNG budget estimates, including appropriate contingencies, LNG said.