LIQUEFIED Natural Gas (LNG) Ltd has reached a deal with its partner in the Magnolia LNG project to extend the closing date of a binding agreement to 31 December, in light of difficult market conditions.
LNG subsidiary Magnolia LNG signed a deal with Meridian in July 2015 that gave the Magnolia facility, located on the Calcasieu shipping channel in the Lake Charles district of Louisiana, firm capacity rights for up to 2 million tonnes of LNG per annum.
Under the deal liquefaction tolling agreement (LTA), Magnolia was to provide liquefaction services to Meridian LNG for up to 25 years in return for monthly capacity payments.
In return, Meridian LNG was 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.
LNG managing director Maurice Brand said the company was seeking out additional offtake agreements for the Magnolia facility, which is planned to have a capacity of eight million tonnes per year.
“(The) financial close date for the Magnolia LNG project is dependent on the execution of further binding offtake agreements, the timing of which is uncertain due to current market conditions,” he said.
“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 agreements.”