Magnolia LNG LLC, a unit of Australia’s Liquefied Natural Gas Ltd., (LNG Ltd.) last week applied to the U.S. Department of Energy (DOE) to export up to 4 million tonnes per annum (mtpa) of liquefied U.S. natural gas to U.S. free trade agreement (FTA) countries, the company said.

LNG Ltd. has also secured a site access agreement at the Port of Lake Charles in Louisiana where it plans to develop the Magnolia LNG liquefied natural gas (LNG) liquefaction and export facility with initial capacity of 4 mtpa, expandable to 8 mtpa.

“The project site has direct access to a number of existing underutilized gas pipelines, which directly access the highly liquid U.S. gas market,” said LNG Ltd., which has begun discussions “with several partners” on a draft tolling agreement for the facility’s capacity. “This tolling arrangement is a common model being adopted by many proposed U.S. LNG export projects and is identical to the model proposed with PetroChina Australia for the company’s” 100% owned 3.8 mpta project in Gladstone, Queensland, Australia, LNG Ltd. said.

The project’s design and construction process is expected to benefit from LNG Ltd.’s experience with the recently completed front end engineering design for its Gladstone project.

“Magnolia LNG is an excellent opportunity to capitalize on the substantial development work and investment that has been made in the company’s Gladstone LNG Project,” said LNG Ltd. Managing Director Maurice Brand. “Essentially, we are replicating a significant component of the Gladstone LNG Project’s technical and engineering development work in the U.S. market, a market that is expected to dominate new global LNG supply for the next decade.

“Whilst the company remains very focused on concluding the EPC [engineering, procurement and construction] contract; tolling agreement and financing for the Gladstone LNG Project, to enable a final investment decision and recommencement of construction in 2013, Magnolia LNG provides the prospect for the company to proceed to construction of a second LNG project in 2015-2016.”

The Louisiana site is about 90 acres and has direct access to the Calcasieu Channel and an industrial canal along which LNG import ships currently supply the existing Trunkline LNG terminal, according to Magnolia’s application. “Over the last few months, the evaluation [of the site] has been positive, and all indications are that the site is capable of accommodating an LNG production and domestic/export facility of up to 8 mpta,” LNG Ltd. said.

DOE approval of exports to FTA countries is expected in February or March, LNG Ltd. said, as such approvals are presumed to be in the public interest. Magnolia has begun preparing its prefiling application for the Federal Energy Regulatory Commission. The first 4 mtpa phase of the project is expected to cost US$2.2 billion. LNG Ltd. said it has been in talks with “several parties” interested in acquiring an equity position in Magnolia LNG.

A similarly sized liquefaction and export project was recently announced for the Texas Gulf Coast at the Port of Corpus Christi (see related story). Multiple projects have secured or are seeking authorization to export LNG to FTA countries and non-FTA countries from the Lower 48.

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