Key approvals for LNGL

THINGS are falling into place for Liquefied Natural Gas Ltd, which this morning announced it had passed critical milestones for its Magnolia and Bear Head LNG export projects in the US and Canada, although there was still a long way to go.
Key approvals for LNGL Key approvals for LNGL Key approvals for LNGL Key approvals for LNGL Key approvals for LNGL

Haydn Black

Reporter

The US Federal Energy Regulatory Commission has issued a draft environmental impact statement for the proposed Magnolia LNG project, Louisiana, following a review of all the data on the plant's operations and the proposed gas pipeline infrastructure.

The commission concluded that construction and operation of the proposed projects would result in limited adverse environmental impacts.

These impacts would be "reduced to less‐than‐significant levels" with the implementation of Magnolia LNG's and Kinder Morgan Louisiana Pipeline's (KMLP) proposed mitigations and the additional measures recommended in the draft environmental impact statement.

The public now has until September 8 to comment on the draft document, with the final EIS expected to be issued by the commission on November 16.

Magnolia LNG is planning for financial close in first quarter 2016 with first LNG in December 2018.

The project is 100% owned by LNGL and comprises the proposed development of an eight million tonne export facility, comprising four 2MMtpa trains using the company's wholly owned optimised single mixed refrigerant (OSMR) LNG process technology.

The OSMR process is based on a proven, simple system with the addition of conventional combined heat and power and ammonia refrigeration technology to significantly enhance the plant performance.

Magnolia LNG's business model provides liquefaction services to LNG buyers who pay a monthly fixed capacity fee, plus all LNG plant operating and maintenance costs.

In Nova Scotia, the US Department of Energy has granted the Bear Head LNG project authorisation to export up to 440 billion cubic feet per annum of US natural gas to Canada, and up to 8MMtpa of LNG from Canada to US free trade agreement countries.

"This is an important step in achieving certainty of gas supply for the Bear Head project," Bear Head project director John Godbold said.

He said Bear Head LNG anticipates a decision in the near future on its application for DOE authorisation to export LNG to non‐FTA countries.

Godbold also noted that Bear Head LNG is the first proposed Canadian LNG export facility to be recognised by the US Federal Energy Regulator as an "approved" Canadian LNG export project.

Bear Head still needs to secure permission from Canadian authorities to import gas from the US and export up to 8MMtpa of LNG in 2019 from Canada, with an expansion 12MMtpa in 2024.

Godbold said it expects these authorisations in the near future.

Bear Head has also applied for authority to import up to 250Bcf per year of Canadian natural gas by pipeline that is in transit through the US, back into Canada for delivery to Bear Head.

That would allow a portion of the Bear Head LNG's natural gas requirements to come from sources in western and central Canada, enhancing commercial supply options.

LNGL hopes to take a final investment decision on Bear Head next year.

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