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Magnolia LNG to Source Gas Via Kinder Pipeline

Magnolia LNG LCC has struck a precedent agreement for pipeline capacity with Kinder Morgan Louisiana Pipeline LLC (KMLP) in support of its proposed natural gas liquefaction and export project in Lake Charles, LA.

The agreement secures sufficient firm gas transportation service rights for the full 8 million tonne per annum (mtpa) capacity of the four-train Magnolia LNG (MLNG) Project. KMLP is expected to install additional compression, pipeline and interconnect facilities to provide the capacity. Magnolia is a unit of Australia's Liquefied Natural Gas Ltd. (LNG Ltd.

"One of the main benefits of the MLNG Project site is that the existing KMLP pipeline directly transverses the site. This has directly assisted the company in developing the MLNG Project in a timely and cost-effective manner and will materially contribute to the MLNG Project potentially being in the first five U.S. LNG export projects to achieve commercial operations," said LNG Ltd. Managing Director Maurice Brand.

Brand said the KMLP agreement "augurs well" for the project's approval by FERC. MLNG is expected to file its formal application with the Federal Energy Regulatory Commission in March or April upon completion of the pre-filing process.

The project has free trade agreement export approval from the U.S. Department of Energy for up to 4 mtpa (see Daily GPI, March 4, 2013), with an application submitted to increase this to 8 mtpa, over 25 years (see Daily GPI, Oct. 16, 2013).

LNG Ltd. announced an equity partner for Magnolia last summer (see Daily GPI, July 30, 2013).

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