Magnolia LNG plans to develop the project site on the Industrial Canal near Lake Charles in Southwest Louisiana as an 8 million tonnes per annum (mtpa) or greater LNG export facility. The Magnolia LNG project will be constructed as four LNG production trains of 2 mtpa each, and guaranteed capacity of 1.9 mtpa per LNG train.
Magnolia LNG has a Precedent Agreement for a 20 year legally binding pipeline capacity agreement with Kinder Morgan Louisiana Pipeline LLC (KMLP). In July 2014, FERC accepted KMLP’s filing application for the installation of compression and related facilities on the KMLP pipeline. In January 2015 a Gas Pipeline Interconnect Agreement was signed between Magnolia LNG and KMLP which sets out the technical scope and specifications for gas supply. On April 15, 2016, the FERC authorized KMLP to install compression and other related facilities on the KMLP Pipeline, facilitating the transportation of full feed gas volumes to the Magnolia LNG project.
In February 2015 a 70/30 Joint Venture Agreement between Kellogg Brown & Root LLC (KBR) and SKE&C USA (KSJV) was agreed in relation to the engineering, procurement and construction (EPC) contract. The EPC scope includes completion of a fully operational LNG plant comprised of four LNG trains of 2 mtpa design capacity each (1.7 mtpa EPC guaranteed capacity), two LNG tanks of 160,000m3 capacity each, LNG ship loading for vessels up to 219,000m3 and LNG truck loading facilities. Magnolia LNG and KSJV have signed a binding lump sum turnkey EPC contract for the full EPC scope having a price of $4.354 billion, with price validity through 31 December 2016.
Magnolia LNG continues negotiations with a number of other LNG buyers for the purchase of LNG on 20-year terms (with extension options). LNG buyers contract for liquefaction services under two contract models – a Liquefaction Tolling Agreement, whereby the LNG export terminal is only responsible for processing natural gas into LNG; and an LNG Sales and Purchase Agreement, under which the customer buys LNG on a free on board basis (FOB).