Magnolia LNG, KMLP pipeline receive FERC authorization

Magnolia LNG LLC, a wholly owned subsidiary of Liquefied Natural Gas Ltd., received US Federal Energy Regulatory Commission authorization to site, construct, and operate a plant to liquefy and export US-produced natural gas from its LNG terminal in Lake Charles, La. The Louisiana Department of Environmental Quality (LDEQ) also approved Magnolia LNG’s air permit.

FERC also authorized Kinder Morgan Louisiana Pipeline LLC (KMLP) to install compression and other related equipment on the KMLP Pipeline, allowing transportation of full feed-gas volumes to Magnolia LNG.

Magnolia LNG proposes to build and operate up to four 2-million tonne/year (tpy) liquefaction trains using the company’s patented optimized single-mixed refrigerant (OSMR) process technology. Construction and operation will include two 160,000-cu m full containment storage tanks; ship, barge, and truck loading; and supporting systems.

Feed gas will come from several US Gulf Coast suppliers, delivered via KMLP under a 20-year binding pipeline capacity agreement. Magnolia LNG has signed a binding agreement with Meridian LNG Holdings Corp. for firm capacity rights for as much as 2 million tpy that has a condition precedent that Magnolia LNG achieves financial close by Dec. 31. Magnolia LNG continues negotiations with a number of other LNG buyers for the purchase of LNG on 20-year terms, with extension options.

A KBR Inc.-SKE&C USA Inc. joint venture will build the project under a lump-sum turnkey engineering, procurement, and construction contract (OGJ Online, Nov. 16, 2015). Magnolia LNG expects to start operations in mid-2018.

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