LNG a step closer to Magnolia funding
PERTH (miningweekly.com) – ASX-listed Liquefied Natural Gas (LNG) expects to finalise the funding for its Magnolia LNG project, in the US, by October.
Following a term sheet agreement with US-based Stonepeak Infrastructures Partners earlier this year, LNG said on Thursday that the company would shortly execute a definitive agreement on the equity finance for the project.
The equity agreements would see Stonepeak provide 100% of the Magnolia LNG project’s estimated equity requirement of $660-million, in exchange for a 50% equity interest in Magnolia LNG, a subsidiary of LNG.
Stonepeak would also assist LNG in securing long-term project debt financing of some $1.5-billion.
Stonepeak would further be entitled to appoint one manager to the board of Magnolia LNG, but the manager would have no voting rights prior to financial close.
The equity deals comprise an equity commitment agreement and a Magnolia LLC agreement that sets out the respective rights and obligations of each company at the end of financial close.
“With the Stonepeak definitive equity agreements to be executed shortly, the company’s main commercial focus will turn to the definitive tolling agreements with Brightshore Overseas for firm and interruptible LNG production capacity of two-million tonnes a year, and Gas Natural SDG.S.A for firm and interruptable LNG production capacity of up to two-million tonnes a year,” said LNG MD Maurice Brand.
An initial development plan for the Magnolia project has determined that it would consist of two LNG trains, with a total capacity of four-million tonnes a year.
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