Liquefied Natural Gas Limited (ASX: LNG) continues to build momentum for its 8 million tonne per annum Magnolia LNG Project in Louisiana with the execution of a Technical Services Agreement with SK Engineering and Construction Group.
Significantly, LNG Ltd is on schedule to lodge its application for Filing with the Federal Energy Regulatory Commission on 30 April 2014.
LNG's TS Agreement with SKEC relates to the ongoing engineering, procurement and construction for MLNG in Lake Charles and replaces the existing Letter of Engagement.
Under the TS Agreement the SKEC Group will, amongst other things:
- Continue to review all the pre‐front end engineering design (OTC:FEED) information and data included in the preliminary Resource Reports submitted to the FERC;
- Assist MLNG to complete the final Resource Reports as part of MLNG's filing application to FERC, which is targeted for submission by the end of April 2014;
- Complete the FEED for the Magnolia LNG Project including gas pre‐treatment facilities, 4 LNG trains (each with nominal LNG production capacity of 2Mtpa), 2 x 160,000 cubic metre full containment storage tanks, jetty and ship loader facilities and all related infrastructure and services;
- Prepare a detailed lump sum turn‐key (NYSEARCA:LSTK) EPC cost estimate on an open book basis by 28 November 2014;
- Negotiate and agree with MLNG a detailed LSTK EPC Contract "Term Sheet", which is targeted for completion by 30 June 2014; and
- Negotiate and agree a definitive and binding LSTK EPC Contract based on the Term Sheet.
SKEC has already been progressing some of these activities and has also completed a detailed review of the company's OSMR® process technology, which will be employed in the Magnolia LNG Project.
It provided the LNG Ltd with an initial estimated EPC cost of US$1.57 billion, which was consistent with its budget estimate, including appropriate contingencies.
LNG Ltd managing director Maurice Brand said EPC activities remained on schedule with the SKEC
Group and will be managed going forward by recently appointed chief operating officer John Baguley, who will commence on the 1 May 2014.
"We also remain on schedule to lodge our application for Filing with the Federal Energy Regulatory Commission (FERC) on the 30 April 2014," he added.
The company had last month received authorisation from the U.S. Department of Energy authorisation to export an additional 4Mtpa of LNG, bringing the total up to the full 8Mtpa nameplate liquefied natural gas production capacity for its Magnolia LNG project.
It follows on LNG Ltd executing a non‐binding Tolling Agreement Term Sheet with AES Latin American Development that supports the economics of proceeding with the fourth processing train at the proposed four train project.
MLNG is planned as a 8Mtpa liquefied natural gas export project comprising of four liquefaction trains, each capable of producing up to 2Mtpa of LNG (1.7Mtpa firm), that is fast-tracked for a robust Final Investment Decision in mid-2015.
The company is currently focused on submitting its application to the US Federal Energy Regulatory Commission (FERC) for full filing status for MLNG and converting the first 4Mtpa of its existing tolling agreements to binding status in the first half of 2014.
Proactive Investors Australia is the market leader in producing news,articles and research reports on ASX "Small and Mid-cap" stocks with distribution in Australia, UK, North America and Hong Kong / China.