Liquefied Natural Gas Limited (ASX:LNG; OTC ADR:LNGLY) has finalised its acquisition of Bear Head liquefied natural gas project in Canada from Anadarko Petroleum Corporation (NYSE:APC) for US$11 million.
This grants the company a second North American LNG project that expands and diversifies LNG's development pipeline.
Notably, Bear Head has established project rights, approvals, LNG tank foundations and significant civil works.
LNG plans to develop the site, which was originally proposed for a LNG import terminal, into an initial 4 million tonne per annum LNG export project with potential for future expansion.
It will use the development, technical and engineering work already completed for the Magnolia LNG Project and integrate with the Bear Head project's existing civil works and detailed engineering work.
Discussions are underway with gas transmission companies to transport natural gas to Bear Head, which has excellent LNG export opportunities to European markets.
"We are very pleased to have finalised the acquisition," managing director Maurice Brand said.
"This is a significant transaction for LNG Limited and is consistent with our strategic plan to selectively secure sites that meet our criteria and develop a strong North American presence. Importantly, Bear Head LNG will further de‐risk the Company's asset base."
He added that Bear Head fit its criteria of a development plan that can either replicate Magnolia LNG or substantially use all its technical, engineering, technology and development expertise.
This includes OSMR® LNG Process Technology that will deliver lower capital costs, improved energy efficiency and a shorter development and construction schedule.
"The Bear Head LNG Project Site has two LNG tank foundations in place with considerable civil works, including roads and culverts, which are advantageous for transforming the site into an LNG export facility," he said.
Brand added the Magnolia LNG project remained on schedule and budget and that the board was satisfied that the acquisition and development of Bear Head will not detract from the company achieving Financial Close of Magnolia LNG in mid-2015.
Bear Head LNG
The Bear Head LNG Project is located in Richmond County, Nova Scotia, Canada, and the key assets include:
- A 255 acre site comprising industrial‐zoned land (180 acres) and deep‐water acreage (75 acres) as well as foundations in place for two 180,000 cubic metre LNG tanks. The land has been cleared, a majority of site works completed and roads constructed; and
- The Project Rights of the previously proposed LNG import terminal, including all assets, rights and obligations associated with the Bear Head project.
LNG Limited plans to transform Bear Head into a 4Mtpa LNG export facility with potential for future expansion.
Discussions are underway with gas transportation companies and owners of gas reserves regarding the supply of natural gas from onshore and offshore Canadian natural gas supply options, and the Marcellus Shale Gas Play in North‐Eastern USA, to the Bear Head LNG project site.
The acquisition of Bear Head LNG from Anadarko expands as well as diversifies LNG's development pipeline.
It does so by adding a second North American LNG project with established project rights, approvals, LNG tank foundations and significant civil works.
In addition, the project fits the company's criteria of being able to either replicate Magnolia LNG or substantially use all its technical, engineering, technology and development expertise.
Proactive Investors continues to believe that LNG Limited will mirror the growth of Cheniere Energy (NYSEMKT:LNG), a US$18.19 billion market cap which expects to export its first LNG from the U.S. in 2015.
Indeed, LNG Limited's shares have rocketed 1,172.4% in the year to date from a close of $0.29 on 2 January 2014 to the current $3.69.
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