ferret's stock to watch: liquefied natural gas ltd

Ferret's Stock to Watch: LIQUEFIED NATURAL GAS LIMITED
07:55, Monday, 11 October 2004


LOCAL COMPANY APPLIES ITS ENERGY LINK CONCEPT TO WORLD SCENE

Sydney - Monday - October 12: (RWE)
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OVERVIEW
********

Investors have been attracted to a unique idea which could
create a steady profit flow for this small company.

Liquefied Natural Gas Ltd has a concept to develop LNG plants,
with production capacity ranging from 100 tonnes to 1,000 tonnes per day,
located near narkets needing energy.

Directors have described the idea as an "Energy Link" strategy to
link "stranded" or "flared/vented" gas with population or demand centres.

At present these are located too far from natural gas resources
and existing pipeline infrastructure to enable the economic supply of
natural gas.

These markets are often located in energy starved developing
regions, which currently consume expensive oil based fuels, such as
diesel and naptha.

Liquefied Natural Gas Limited (ASX Code:LNG) has signed a
Memorandum of Intent (MOI) with a major Indian industrial group for the
15 year supply of up to 365,000 tonnes per annum (1,000 tonnes per day)
of liquefied natural gas (LNG) to the customer's operations in Southern
India.

This new customer takes the company's total LNG supply under
MOI's to up to 1,350,500 tonnes per annum (3,700 tonnes per day).

The LNG will be used by the new customer to replace its
current use of higher priced oil based products.

Managing director, Mr Maurice Brand, said that the new MOI was
significant for Liquefied Natural Gas because it:

* Represented another major milestone in achieving LNG Ltd's
contracted LNG sales target of 1,825,000 tonnes per annum (5,000 tonnes
per day) by the June 30, 2005;

* Diversified LNG Ltd's industry exposure by being the first of
the Company’s MOI's for the supply of LNG for use other than fuel for
power generation; and

* Established a third region in Southern India where the company
plans to supply LNG and presented the opportunity for further LNG sales.

Mr Brand said that LNG Ltd was ahead of schedule in achieving its
targeted LNG supply tonnage.

The emphasis over the near term will be on entering into LNG
sales agreements for the MOI tonnage secured and accessing additional
natural gas feedstock for the Company’s planned LNG production plants.

Among the deals already signed up is a project in Tanzania.

LNG Ltd's business strategy also aims to remain at the forefront
of LNG processing technology (including development and/or implementation
of enhanced LNG processing technologies) to ensure the Group's LNG plants
are world competitive in operating efficiencies and capital and operating
costs.

The company has identified the potential to use waste heat from
the LNG production process to drive an "ammonia absorption" unit at the
front end of the pre-cooling process.

Ammonia absorption technology has been, and continues to be, used
successfully in the refrigeration industry but so far has not been used
in the production of LNG.

SHARE PRICE MOVEMENT
********************

Shares of Liquefied sold at 37c on Friday. Rolling high has been
41c and low 20.5c, still above its issue price in its brief existence on
the list. However, share trading on the first day began quietly with
shares opening at 21c and settling at 21.5c. In the first 15 minutes of
business on September 14, almost 1.2 million of the 47.2 million shares
on issue changed hands.

Meanwhile the adoption of the technology will enable a
substantial improvement in the efficiency of LNG production plants,
including reduced capital and operating costs and decreased green house
gas emissions.

An independent review of the technology by Twister BV (a company
principally owned by Shell) has confirmed the substantial benefits of the
technology.

This will provide the group with an important technical and
commercial edge over any potential competitors.

The smaller scale and modular nature of the group's LNG plants
will enable the rapid application of enhanced LNG processing
technologies, including the retrofit of existing LNG plants.

LNG Ltd has set a target of 5,000 tonnes per day of contracted
LNG supply by June 30 2005.

Liquified Natural Gas claims to bring a new concept to the
international energy market.

It was formed as "the energy link" between previously discovered
but non-commercial gas reserves and potential new energy markets
identified by the company.

The gas will be delivered to these markets as liquified natural
gas, replacing expensive and less environmentally attractive oil-based
fuels using innovative production technology.


BACKGROUND
**********

Liquefied Natural Gas Ltd joined the sharemarket lists last month
with the shares issued at 20c on September 14.

The LNG aims to replace expensive and less environmentally
attractive oil based fuels on a competitively priced basis using
innovative LNG production technology.

The energy link strategy has been developed by a team of industry
professionals with a proven track record in the development and operation
of energy projects in Australia and internationally.

Meanwhile LNG Ltd has an active program of identifying and
evaluating prospective gas discoveries as potential feedstock for its
proposed LNG plant developments.

LNG Ltd's preference is to secure access to gas feedstock via
long term gas sales Agreements, under which a third party will own and
develop the gas field.

However, LNG Ltd for strategic reasons (eg, timely development of
gas production facilities) may from time to time invest directly in gas
discoveries, through its wholly owned subsidiary Quest Energy Pty Ltd
(Quest).

Such investment will be in gas discoveries with proved and
probable gas reserves.

It is not the intention for Quest to invest in gas exploration
activities.

LNG Ltd's wholly owned subsidiary LNG International Pty Ltd
(LNGI) has entered into a Memorandum of Understanding with Artumas Group
Inc (Artumas) of Canada who has a Production Sharing Agreement with the
Tanzanian Government for the rights to the offshore Mnazi Bay gas
discovery near the Port of Mtwara in Tanzania.

The Memorandum of Understanding proposes the long term (at least
15 years) supply of gas and electrical power to support development by
LNGI of a 700 tonne per day LNG production plant at the Port of Mtwara.

The proposed LNG plant would supply LNG to the GMR Power Project.

As part of LNG Ltd's gas resource access program, LNG Ltd has
entered into a Memorandum of Understanding, with Aminex Plc (an
independent oil and gas company listed on the London Stock Exchange)
under which the parties agree to negotiate in good faith a Collaboration
Agreement in relation to gas field development and LNG production project
development opportunities in Tanzania.

Aminex Plc, by way of the Nyuni/East Songo Songo Production
Sharing Agreement with the Tanzanian Government, has the rights to the
offshore Nyuni/East Songo Songo permit; located near the Songo Songo gas
discovery which is due to start production in 2004 and will sell gas to
the Tanzanian capital of Dar es Salaam, via a 220 km pipeline (which is
also due for commissioning in 2004).

Aminex Plc has secured a right of access to the pipeline for any
future gas production from its Nyuni/East Songo Songo gas discovery.

In addition to this gas discovery Aminex is undertaking a broader
review of prospective gas discoveries in the Middle East and East Africa
to supply LNG Ltd's proposed LNG plants.

LNG has entered into a Memorandum of Understanding with GAIL
(India) Ltd to undertake a pre-feasibility study to liquefy and transport
flared gas from the PY3 oil and gas field located 20 kilometres offshore
from Tamil Nadu.

ENDS

Copyright © 2004 RWE Australian Business News. All rights reserved.

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Cheers,

Fig Jam

I don't hold LNG