Page 14 - GLNG Week 19

GLNG AMERICAS GLNG
LNGL sells Magnolia LNG
INVESTMENT
AUSTRALIA-BASED LNG Ltd (LNGL) has sold its proposed Magnolia LNG project in Louisiana, on the US Gulf Coast. The deal was announced after LNGL appointed administra- tors at the end of April, entering the Australian equivalent of bankruptcy proceedings.
LNGL said in a May 12 statement that it was selling the subsidiaries that own and operate Magnolia LNG, including Pecan, LNG Manage- ment Services and LNG Technology, to Global Energy Megatrend for $2.25mn.
The transaction improves the prospects for Magnolia LNG after the project recently found itself plunged into uncertainty. Singapore-based LNG9 had been planning to acquire LNGL for $75mn but withdrew its bid in mid-April after financing for the proposed takeover collapsed. LNGL warned at the time that it had sufficient cash reserves to meet all of its financial obliga- tions until May, but “urgently” needed to secure additional funds in order to continue operating beyond this point.
The proposed Magnolia LNG plant is author- ised to produce 8mn tonnes per year of LNG. A request to increase the facility’s production by a
further 800,000 tpy is still pending with federal regulators. A final investment decision (FID) has not been made, however, and LNGL had not locked in any buyers for Magnolia’s output – with one would-be offtaker dropping out in late 2018. However, LNGL had signed a non-bind- ing memorandum of understanding (MoU) with Delta Offshore Energy to supply 2mn tpy to the proposed Bac Lieu LNG-to-power project in Vietnam.
Global Energy Megatrend is incorporated in London but headquartered in Lafayette, Louisi- ana. The company has not commented publicly on the acquisition, but it is reportedly interested in participating in US gas fields, pipelines and liquefaction facilities. The company is also set to acquire the optimised single mixed refrigerant (OSMR) liquefaction technology that LNGL planned to use at Magnolia LNG.
LNGL noted that it would retain its own- ership of the proposed Bear Head LNG project in Eastern Canada. Bear Head LNG would also retain a perpetual licence to use the OSMR technology, the Australian com- pany added.™
NextDecade aims for FID this year, but issues warning
PROJECTS & COMPANIES
US LNG developer NextDecade has provided US securities regulators with an update ahead of the release of its delayed quarterly earnings report, which is being pushed back to around May 18 from the original deadline of May 11. While the company said that it was still target- ing a final investment decision (FID) on the Rio Grande LNG project in South Texas this year, it noted that the timing could be affected by the impact of the coronavirus (COVID-19) pandemic.
In a May 8 securities filing, NextDecade added a COVID-19 risk factor in order to comply with federal guidance. This risk factor describes the possible impacts of the pandemic on its business, including a delay to the timing of the FID on Rio Grande LNG. However, a Next- Decade spokesperson, Toni Beck, told Reuters that the filing did not constitute an update on the timing of the FID. This suggests that the company still hopes to reach FID in line with its previous schedule after all, but is proceeding cautiously as market conditions deteriorate.
“Prospects for the development and financing
of the [Rio Grande] terminal are based in part on factors, including global economic conditions that have been, and are likely to continue to be, adversely affected by the COVID-19 pandemic,” the company said in its filing.
“This macro-economic disruption may disrupt our ability to raise additional capital to finance our operations in the future, which could materially and adversely affect our busi- ness, financial condition and prospects, and could ultimately cause our business to fail,” it added.
If the company does announce an FID on the Rio Grande terminal this year, the facility would enter service in 2023. NextDecade has con- tracted engineering firm Bechtel to build either two liquefaction trains for the project at a cost of $7.0bn, or three trains for $9.6bn. Each train would have a capacity of 5.87mn tonnes per year (tpy) of LNG.
The warning comes after another LNG devel- oper, Sempra Energy, last week delayed an FID on its Port Arthur LNG project, also in Texas, until 2021.™
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w w w . N E W S B A S E . c o m Week 19 15•May•2020