Shares of Liquefied Natural Gas Limited (ASX:LNG) have jumped more than 16 per cent during trading hours on Friday. The company announced that its 100 per cent owned company, Magnolia LNG has been notified by Meridian LNG Holdings Corp. that Meridian intends to progress the 20-year liquefaction tolling agreement (LTA) between the two companies. The Magnolia project comprises of the development of an 8-mtpa LNG project on a 115-acre site in the US state of Louisiana. In November 2013, Magnolia and Meridian LNG entered into a 20-year tolling agreement term sheet, with a five-year option, for LNG production capacity of 1.7 million tonnes per annum (Mtpa). There was an additional clause which allowed for a further 300,000 tonnes per annum. The two companies have now mostly completed the negotiation of a LTA and will move forward to complete the agreement for a total of 2Mtpa.
Under the agreement, Meridian will be responsible for the delivery of gas to Magnolia for liquefaction, plant use, storage and delivery onto transport ships. Magnolia will be paid monthly capacity fees over the length of the agreement. Meridian LNG, working closely with its operating partner Höegh LNG, will deliver liquefied natural gas to the Port Meridian LNG import terminal in the UK, with the possibility of other locations as well. "We congratulate Meridian LNG on the signing of its Gas Sales Agreement with E.On and look forward to concluding negotiations and execution of the Meridian LTA," said Magnolia's Chief Commercial Officer, Rick Cape. “We are also pleased with the progress being made on additional tolling agreements, and LNG sales and purchase agreements and are confident we will close out the full 8 mtpa of Magnolia LNG production capacity.”
Shares of LNG are up 70c, or 16.87 per cent, at $4.85 per share. Shares of the company have skyrocketed in the past year. LNG is up over 640 per cent in the last 12 months and over 100 per cent so far this year.
Author: Matthew Dibb
Apr 24, 2015
Matthew has an extensive track record in equity markets and derivative advisory. Spanning a career in several investment banks and prviate wealth groups including Macquarie Bank, his specialist knowledge relates to capital market advisory and equity market analytics. Matthew has a diploma in Financial Advisory, Applied Finance and is ADA 1 & 2 accredited.