LNG Limited updates Magnolia LNG contract validity

Perth-based LNG Limited has agreed to an updated legally binding lump sum turnkey EPC contract with the KBR-SKE&C joint venture (KSJV) for the Magnolia LNG project.

LNGL said on Monday that the contract was arranged through its wholly-owned subsidiary Magnolia LNG LLC.

According to the company, the updated agreement reflects the entire scope of the original EPC contract amended for updated subcontractor pricing, costs associated with increasing Magnolia’s liquefaction capacity, and additional scope of work to be provided by the KBR-SKE&C JV that were previously LNGL’s responsibility.

The updated agreement is valid until December 31, 2019, and incorporates the 0.8 million mtpa capacity uplift for Magnolia, which is undergoing Federal Energy Regulatory Commission (FERC) approval process, for a total installed capacity of 8.8 mtpa.

LNGL managing director and CEO, Greg Vesey said: “The updated EPC contract cost is $4.623 billion based on 8.8 mtpa, providing an installed capacity EPC cost per tonne price of $525.”

The initial agreement with KSJV was signed on November 16, 2015, with an installed capacity EPC cost per tonne range of $495 to $544 based on the final design a final investment decision (FID).

It is worth reminding that LNGL extended the validity period of the initial contract in June 2018.