LNG Ltd. signs up gas Spanish utility for Magnolia gas processing venture in Louisiana
BY STEPHEN BELL
SYDNEY -- Liquefied Natural Gas Ltd. (LNG) said it has signed a second customer for its proposed Magnolia gas processing venture in the United States after agreeing a sales deal with Gas Natural SDG, a Spanish utility.
The initial agreement involves Gas Natural sourcing natural gas from shale fields that can be processed at LNG's plant in Louisiana state. Gas Natural will then have the right to take up to 2 MMmt of LNG each year to sell to users.
According to the deal terms, Gas Natural will pay LNG a monthly capacity fee, and fund some of the operating and maintenance costs. LNG aims to use its own liquefaction technology for Magnolia. The plant's first phase will cost around $2.2 billion and produce around 4 MMtpy of LNG.
The plant would be built near LNG shipping channels in the Lake Charles District of Louisiana.
The deal increases Gas Natural's exposure to the emerging United States gas export sector, as the Spanish energy group is one of the foundation customers for Cherniere Energy Partners' Sabine Pass gas export project, also in Louisiana.
Last month, LNG signed a similar deal over Magnolia with a unit of Gunvor Group, a commodities trader.
Dow Jones Newswires