Magnolia LNG project moving forward; construction could begin summer 2019
By John Guidroz [email protected] Officials behind the multibillion-dollar Magnolia LNG project said they are confident it could reach final investment decision by early 2019, with construction starting that summer.
Greg Vesey, CEO of LNG Ltd., the Australian-based company behind the project, told the American Press editorial board on Thursday that the possibility of a final investment decision happening at the end of this year is “not out of the question,” but is more likely to happen in 2019.
“It’s the energy industry, and you have to be patient,” he said. “If you rush the energy industry, you make dumb mistakes.”
While the last two years have been a “dry market for the LNG business,” he said it started to turn around this year. Europe and Asia are the two areas that have the most interest in LNG. But President Donald Trump’s order earlier this month to impose a 10 percent tariff on $200 billion worth of imported Chinese goods has caused a hiccup in those discussions.
“The big three in Asia, China, Korea, Japan, are all looking to buy,” Vesey said. “We continue to work diligently to come together on a deal, but they’ve pretty much said to us, ‘We’re not going to execute until this is all resolved.’ ”
Vesey said interested buyers will sign a 20-year deal at a specific rate. The facility will produce 8 million tons of LNG per year.
Micah Hirschfield, LNG Ltd. senior manager of communications and investor relations, said a final investment decision could be made with 6 million tons per year secured.
Magnolia will have four trains producing 2 million tons of LNG per year. Vesey said building the first train will take more than three years, with each additional train taking three months to construct.
The lull in the LNG market, Vesey said, has allowed officials to refine Magnolia’s construction model. He said the facility will likely be assembled in China and shipped to Calcasieu Parish.
“It’s not only modular, but it’s pretty close to plug-andplay,” Vesey said. “It’s a very efficient way to build.”
Vesey said the project will create 1,500 construction jobs and employ 190 full-time workers. The project is expected to create 1,500 construction jobs and employ 190 full-time workers.
LNG Price at posting:
69.5¢ Sentiment: Buy Disclosure: Held
