Liquefied Natural Gas Limited (ASX:LNG, OTC ADR:LNGLY) has executed a Gas Pipeline Interconnect Agreement (PIA) with Kinder Morgan Louisiana Pipeline (NYSE:KMI).
Kinder Morgan is the largest energy infrastructure company and fourth largest energy company in North America with a market cap. of almost US$90 billion.
It has an enterprise value of more than US$125 billion and has an interest in or operates about 80,000 miles of pipeline and 180 terminals. These pipelines transport natural gas, refined petroleum products, crude oil, carbon dioxide (CO2) and more.
This sets out the technical scope and specifications for gas supply to the 8 million tonne per annum Magnolia LNG Plant at Lake Charles, Louisiana.
The PIA also defines each parties' obligations in relation to the design, procurement, construction, installation, operations, maintenance and ownership of the facilities.
"The Kinder Morgan Louisiana Pipeline is an existing interstate gas pipeline system that traverses the Magnolia LNG Plant site," managing director Maurice Brand said.
"Magnolia has already entered into a legally binding agreement with KMLP to access 1.4 billion cubic feet of gas per day of capacity over a 20-year term. This capacity is sufficient for Magnolia LNG to produce its full 8Mtpa design capacity."
Magnolia LNG project, Lake Charles, Louisiana
LNG Ltd continues to progress with the U.S. Federal Energy Regulatory Commission (FERC) all necessary permits and approvals for the development of the Magnolia LNG project, which included responses to various anticipated engineering data and environmental information requests.
It has also reached an engineering, procurement and construction (EPC) contract containing fixed and provisional sums agreed with SKE&C USA, Inc. (SKEC).
Total capital cost for the planned 8 million tonnes per annum (Mtpa) project remains as previously stated on 24 February 2014 at US$3.5 billion, equating to US$440/tonne.
In January, Magnolia LNG also executed a memorandum of understanding with Kellogg Brown & Root LLC, a wholly owned subsidiary of KBR, Inc. (KBR) and SKEC.
Under the MoU, whereby KBR and SKEC propose to execute a joint venture agreement on a 70/30 percent participation basis to deliver the 8Mtpa four train Magnolia LNG Project.
KBR will be the leader of the EPC Contract.
Negotiations are continuing with all four proposed tolling parties and several others.
Magnolia LNG remains on schedule for financial close in mid-2015 and first LNG in the fourth quarter of 2018.
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