Magnolia Tolling Agreement Update with Meridian LNG

The Directors of Liquefied Natural Gas Limited (LNGLF) infomed that its 100% owned project company, Magnolia LNG, LLC (Magnolia), has been notified by Meridian LNG Holdings Corp. that Meridian LNG intends to progress the 20‐year liquefaction tolling agreement (LTA) with Magnolia, now that Meridian LNG has executed a 20‐year gas sales agreement (GSA) with E.On Global Commodities SE (a wholly owned company of E.On (www.eon.com). 

Magnolia and Meridian LNG have substantially completed the negotiation of a LTA, agreeing key commercial terms and will now move forward to complete binding agreements for a total of 2 million ton per annum (mtpa). The Company will announce the LTA terms upon execution of the binding contract.

Under the proposed LTA, Meridian LNG will be responsible for delivery of gas to Magnolia for liquefaction, plant usage, storage, and delivery onto LNG ships arranged by Meridian.  Magnolia will be paid monthly capacity fees over the 20‐year tolling term.

Meridian LNG, together with its operating partner Höegh LNG, will deliver LNG from Magnolia to the Port Meridian LNG import terminal in the UK, as well as potentially to other destinations compatible with Höegh’s Floating Storage and Regasification Units (FSRU) vessels.  Meridian LNG will deliver re‐gasified LNG to E.On Commodities on the UK NTS (National Transmission System) pursuant to the GSA. 

Magnolia’s Chief Commercial Officer, Mr. Rick Cape, said, “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.”

“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,” said Mr. Cape. 

By way of background, on 26 November 2013, Magnolia and Meridian LNG announced that they had entered into a 20‐year tolling agreement term sheet (with a five year option) for firm LNG production capacity of 1.7 mtpa with a possible further 300,000 mtpa under preferred conditions. Since  that  time  both  parties  have  progressed  development  of  their  respective  projects, culminating in this status update.