PERTH (miningweekly.com) – ASX-listed Liquefied Natural Gas (LNG) has placed some 40-million fully paid ordinary shares to raise A$174-million to fund its Magnolia and Bear Head LNG projects, in North America, and to potentially fund the acquisition of a third project in the area.
The shares would be placed to institutional and sophisticated investors at an issue price of A$4.35 each. The issue price was a 5% discount to the volume-weighted average price for the five trading days leading up to May 15.
The placement would be undertaken under the company’s current 15% capacity, and as such would not require shareholder approval.
LNG MD Maurice Brand said on Wednesday that the capital raised would help the company to progress its projects under development. The Magnolia project is in the US and the Bear Head project is in Canada.
“Commencement in the second half of 2015 of an early works expenditure programme at the Magnolia LNG project will comprise detailed engineering and ordering of critical long-lead equipment items to accelerate the site work scheduled following the receipt of the schedule of environmental review from the Federal Energy Regulatory Commission.”
Brand said that timing of the full early works expenditure was expected to align with Magnolia’s execution of binding offtake agreement for at least two LNG trains with a design capacity of four-million tonnes a year, and the finalisation of pricing for the engineering, procurement and construction contract, and was consistent with LNG’s plan to achieve first LNG from the Magnolia project by December 2018.
Meanwhile Brand noted that LNG had also made progress with the Bear Head project, in Nova Scotia.
The company this week received approval from the Nova Scotia Department of Environment (NSE) for the updated provincial environmental assessment for the development of an eight-million-tonne-a-year LNG export facility.
The NSE approval was the last of the ten initial federal, provincial and local regulatory approvals required to construct an LNG export facility.
Front-end engineering and design (Feed) work on the project had started, and a final investment decision on the Bear Head project was expected by 2016.
Brand said that expenditure on the Bear Head LNG project would focus on access to feed gas supplies and Feed for a full eight-million-tonne-a-year export facility, maximising the use of the complete Feed for the Magnolia LNG project.
“The company has also been investigating other potential opportunities where we can leverage our mid-scale LNG strategy and OSMR technology into a third North American project,” Brand said.
No further details were given about a possible project acquisition.