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LNG macro analysis, page-1992

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adrianr86

82 Posts.

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05/04/19

22:53

Post #: 38021454
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Originally posted by Matt3: ↑

https://www.upstreamonline.com/

5/4/2019

Australia-listed Liquefied Natural Gas Ltd (LNG Ltd) is looking to China for exports of the bulk of gas from its proposed Magnolia LNG project in the US, which will help in making a final investment decision.Company officials said that LNG Ltd is talking to a number of buyers in China to sell a minimum of 3 million tonnes per annum of LNG to help move the project to sanction, which is expected soon.They said currently most Chinese buyers are more interested in short-term deals with smaller volumes so as to meet demand in the peak winter season. While company officials declined to mention the names of the potential buyers in China, sources suggested that they could be national oil companies or independent town gas distributors.They added that LNG Ltd will only need to sign half the 8.8 million tpa of expected total throughput capacity to get to a final investment decision. “The project has received all the permits from the US government and will take off once the offtake contracts are concluded,” said a company official.LNG sellers are busy this week in Shanghai at the LNG2019 conference trying to fix their cargoes to Chinese buyers under long-term supply contracts.While companies with easy LNG supply ability in Asia and Australia - such as Malaysian state player Petronas and Australian independent Woodside Petroleum - enjoy relatively more restricted market access to China, those in the US face an uphill struggle to conclude such contracts in part due to political and trade frictions between China and USA.Although it appears both buyers and sellers from the US and China are involved in intensive talks for possible purchase and sales agreements, so far they have stopped short of signing any agreements before the trade issues are resolved.The US and China have been engaged in an ongoing trade war in recent months, introducing tariffs on goods traded with each other. LNG Ltd managing director Gregory Vesey said late last year the trade issues had affected LNG Ltd’s discussions with potential Chinese LNG buyers, but added negotiations with customers in other parts of the world “remain strong”.While the company is targeting LNG sales under long-term sales and purchase agreements, it would also be willing to enter into tolling agreements under what it calls certain conditions. It can also facilitate LNG shipping arrangements.The proposed Magnolia LNG project will be built at Lake Charles, Louisiana, and have initial capacity to produce 4 million tpa of LNG from two trains, which could be expanded with two additional trains in a later phase development.The company has already signed an engineering, procurement and construction contract with a joint venture between KBR and SK. This contract will be extended at six-month intervals.The turnkey EPC contract is valued at $4.354 billion including everything necessary from the current greenfield condition into a fully operational and performance-tested LNG facility.

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Fantastic find thanks mate. Wish management would communicate this with shareholders.

LNG Price at posting: 44.0¢ Sentiment: Hold Disclosure: Held
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0 Great analysis

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