Magnolia LNG Terminal

From Global Energy Monitor
This article is part of the Global Fossil Infrastructure Tracker, a project of Global Energy Monitor.
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Magnolia LNG Terminal is a proposed LNG export terminal in Louisiana, United States.

Location

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Project Details

Phase 1

  • Operator: Magnolia LNG Holdings[1]
  • Operator: LNG Ltd[2]
  • Owner: Glenfarne Group[3]
  • Location: Lake Charles, Louisiana, United States
  • Coordinates: 30.105668, -93.300819 (exact)
  • Type: Export[4]
  • Trains: 2[4]
  • Capacity: 4.4 mtpa (2.2 mtpa per train)[4]
  • Status: Proposed[3]
  • Type: Export[3]
  • Start Year: 2026[3]

Phase 2

  • Operator: Magnolia LNG Holdings[1]
  • Operator: LNG Ltd[2]
  • Owner: Glenfarne Group[3]
  • Location: Lake Charles, Louisiana, United States
  • Coordinates: 30.105668, -93.300819 (exact)
  • Type: Export[4]
  • Trains: 2[4]
  • Capacity: 4.4 mtpa (2.2 mtpa per train)[4]
  • Status: Proposed[3]
  • Type: Export[3]
  • Start Year: 2026[3]

Note: mtpa = million tonnes per year; bcfd = billion cubic feet per day

Background

Magnolia LNG Terminal is a proposed LNG export terminal in Lake Charles, Calcasieu, Louisiana, United States.[5] Magnolia LNG received its Federal Energy Regulatory Commission (FERC) permitting in April of 2016, which authorized the project's construction and operation.[6] In March 2017, Magnolia LNG announced that the start of construction depends on finalizing the ground lease where the property is cited. Parent Company, LNG Limited, went on to explain that the timing of the project's final investment decision (FID) and construction start dates depend on the finalization of offtake agreements.[7]

Although the project has been slow to develop, in March of 2019, authorization was granted from the US Department of Energy (DOE) for expansion of export capacity to 8.8 mtpa (from 8.0 mtpa) to free trade agreement countries, suggesting that the project is still underway.[8]

In September 2020, under the new ownership of the private US investment firm Glenfarne Group, Magnolia LNG asked FERC for another five years – out to April 2026 – to complete the project and associated facilities that would supply the terminal. In its request the company stated: "Unforeseeable developments in the global LNG market have affected Magnolia LNG's ability to enter into long-term LNG offtake contracts with international customers, which are critical to securing project financing and achieving FID ... A short-term over-supply across the global LNG market, coupled with disruptions in the China-United States LNG trade and the ongoing COVID-19 pandemic, have delayed these offtake contracts and further delayed FID for the project."[9]

At the Gastech conference in September 2021, Glenfarne Group's Project Director John Baguley told reporters that the project's FID was further delayed, probably out to the end of 2023.[10]

In April 2022, the Biden Administration authorized additional exports of 0.15 Bcf/day (1.1 mtpa) from the proposed Magnolia LNG facility.[11][12] It was reported that month that Glenfarne was considering taking FID in 2022.[13]

Financing

It emerged in late March 2020 that the project is in financial jeopardy and could be liquidated due to factors exacerbated by the coronavirus pandemic. Bridge financing, to permit the Australian promoter LNG Limited to continue operating until a proposed US$75 million takeover by a Singaporean investor takes place, fell through in March, leaving the company scrambling to arrange short-term financing after First Wall Street Capital Corp. pulled out of a finance package agreement. Magnolia LNG does not have any confirmed offtake agreements with LNG importers and efforts to secure these are being directly hampered by the coronavirus as well as by deteriorating LNG market conditions which the global pandemic has made worse.[14]

In May 2020, further doubt was cast on the project following the announcement that LNG Limited's mounting financial problems had resulted in the calling in of administrators PriceWaterhouseCoopers to review the company's assets, as well as the resignation of four LNG Limited directors.[15] On May 12, 2020, it was announced that LNG Limited had sold the undeveloped Magnolia LNG terminal to Global Energy Megatrend Limited, an LNG company incorporated in London, U.K. but with its headquarters in Lafayette, Louisiana, in a US$2.25 million deal. Global Energy Megatrend is an integrated natural gas company that has been leasing U.S. natural gas fields and investing in pipelines that lead to Louisiana ports and LNG export terminals.[16] In June 2020, it was reported that the deal with Global Energy Megatrend had fallen through and that Magnolia LNG Holdings, owned by the New York based Glenfarne Group, had bought the project in a US$2 million deal.[1]

In August 2020, Vietnam's Delta Offshore Energy announced that it would not be renewing a Memorandum of Understanding it had signed with LNG Limited in January 2020 for the purchase of 2 mtpa from the project, which was to be used to supply Vietnam's Bac Lieu LNG-to-power project.[17]

Articles and resources

References

  1. 1.0 1.1 1.2 New York energy conglomerate says it is new owner of Magnolia LNG Houston Chronicle, June 9, 2020
  2. 2.0 2.1 U.S. Liquefaction Capacity. EIA. Accessed May 2022.
  3. 3.0 3.1 3.2 3.3 3.4 3.5 3.6 3.7 Magnolia LNG gets 5-year FERC permit extension Oil and Gas Journal, October 9, 2020
  4. 4.0 4.1 4.2 4.3 4.4 4.5 Magnolia LNG Project, Lake Charles, Louisiana NS Energy Business, accessed April 13, 2021
  5. Magnolia LNG Export Terminal Project, A Barrel Full, 15 November 2015
  6. Assets: Magnolia LNG, LNG Limited, Accessed 11 June 2017
  7. Magnolia LNG requests ground lease finalization, LNG World News, 27 March 2017
  8. Liquefied Natural Gas - Higher capacity at 8.8Mtpa, lower SPA pricing FinanzNachrichten, June 11, 2019
  9. Corey Paul, Magnolia LNG seeks 5 more years to build export terminal, citing market turmoil, S&P Global, Sep. 15, 2020
  10. GASTECH 2021: Bullish prices for suppliers could temper long-term LNG demand, S&P Global, Sep. 21, 2021
  11. Daly, Matthew. Energy Dept OKs expanded LNG exports from Texas, Louisiana. Associated Press. April 27, 2022.
  12. Magnolia and Golden Pass Increases. LNG Allies. April 27, 2022.
  13. "Glenfarne eyes FID on its two US LNG export projects in 2022". LNG Prime. 2022-04-29. Retrieved 2022-05-10.
  14. LNG Limited's required financing to stay afloat falls through, S&P Platts Global, Mar. 27, 2020
  15. The Offtake: LNG in Brief, Natural Gas Intel, May 1, 2020
  16. Magnolia LNG sold to British company in $2.25 million deal, Houston Chronicle, May 12, 2020
  17. S&P Global Newdesk-Vietnam and Eric Yep. Vietnam's Delta Offshore Energy backs away from renewing MOU with Magnolia LNG. August 11, 2020.

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External resources

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