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Liquefied Natural Gas Ltd Reaches Milestone In FERC Process For Magnolia LNG

Liquefied Natural Gas Limited (ASX:LNG, OTC ADR:LNGLY) has reached a major milestone in the Federal Environmental Regulatory Commission (FERC) process for its Magnolia LNG Project in Louisiana.

The project remains on track to achieve Financial Close in mid‐2015 and first LNG in 2018.

LNG Limited has received the anticipated Engineering Data information request from FERC. This is usually one of the final information requests sought by FERC before the issue of a Notice of Schedule and draft Environmental Impact Statement.

In addition, the timing of the request will enable the agreed outcomes to be included in the final detailed engineering design by proposed EPC contractor, SK Engineering and Construction Group, which is to be completed by 31 March 2015.

The company expects to respond to the request by 29 December 2014.

These information requests are part of the normal process for applications filed under Sections 3 and 7 of the Natural Gas Act for LNG terminals in the USA.

They allow FERC to clarify certain aspects of the filings to assist them to complete and issue a draft Environmental Impact Statement for MLNG.

Managing director Maurice Brand said he was pleased with the solid progress being made to finalise the FERC Filing progress and the targeted issue of a Notice of Schedule in early 2015.

"The FERC process is running in parallel with the company moving towards a bankable EPC contract and long term Tolling Agreements, and augers well for Magnolia LNG to achieve its primary goal to achieve Financial Close in mid‐2015 and first LNG in 2018," he added.

Magnolia LNG

Magnolia LNG, located along the Calcasieu River near Lake Charles, is planned as a 8 million tonne per annum (Mtpa) liquefied natural gas export project comprising of four liquefaction trains, each capable of producing up to 2Mtpa of LNG (1.7Mtpa firm).

This will use LNG Limited's OSMR® LNG process technology with the company adopting a tolling business model whereby Magnolia LNG will provide liquefaction, storage and ship loading facilities to LNG buyers who pay a monthly fixed capacity fee, plus all LNG plant operating and maintenance costs.

The LNG buyers are also responsible for the supply and transportation of gas to the project site.

LNG Limited has tolling agreements covering 7Mtpa of the project's planned 8Mtpa capacity and is currently focused on converting the first 4Mtpa to binding status in the first half of 2014.

Earlier this month, the company agreed on a Engineering, Procurement and Construction contract for its Magnolia LNG (MLNG) export project in Louisiana with SK Engineering and Construction Group.

Capital costs for the initial contracted work for two of the four planned 2Mtpa liquefaction trains is estimated at US$1.986 billion.

Total capital cost for the 8 million tonne per annum project remains at US$3.5 billion, or US$440 per tonne.

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