THE LOUISIANA LNG project developed by Australian company Liquefied Natural Gas is to start providing gas to Meridian LNG under a deal signed in 2013.

In 2013 the companies signed a 20-year tolling agreement term sheet that would see Liquefied Natural Gas subsidiary Magnolia LNG provide Meridian with firm LNG production capacity of 1.7 million tonnes per annum (mtpa), with a possible further 300,000 mtpa under preferred conditions.

Meridian has moved on the 2013 deal after it executed a 20-year gas sales agreement with E.On Global Commodities (EGC) in the United Kingdom.

Under the deal, Meridian will provide 2 million tonnes of LNG to EGC every year, delivered through its planned Port Meridian import and regasification terminal.

Port Meridian will consist of a floating storage and regasification unit, a subsea pipeline and onshore facilities connecting into the UK national transmission system.

As a result, Magnolia and Meridian have agreed on key commercial terms in its liquefaction tolling agreement (LTA) and will now move forward to complete binding agreements for the 2 million Mtpa .

Meridian will be responsible for delivering the gas to Magnolia for liquefaction, plant usage, storage and delivery onto LNG ships arranged by Meridian.

Together with its partner Hoegh LNG, Meridian will also deliver LNG from Magnolia to the Port Meridian LNG import terminal.

EGC will also have the option of buying incremental volumes of up to 750 million standard cubic feet of gas per day – the estimated maximum daily throughput of the Port Meridian terminal.

In an announcement, Magnolia chief commercial officer Rick Cape welcomed the signing of the agreement, adding that he looked forward to concluding negotiations between the two groups.

“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 8Mtpa of Magnolia LNG production capacity,” he said.