Magnolia LNG Seeks More Time
The new owners of the Magnolia LNG project in Louisiana have asked the US Federal Energy Regulatory Commission (Ferc) for another five years to complete the 8.8mn mt/yr liquefaction terminal.
The Glenfarne Group, which acquired Magnolia in May from Australia’s LNG Limited, filed the request with Ferc on September 11, and also asked that Kinder Morgan Louisiana Pipeline’s (KMLP) Lake Charles expansion project, which would have supported the delivery of 1.4bn ft3/d of feed gas to Magnolia, be granted the same extension. It now wants until April 21, 2026 to bring the liquefaction and pipeline compression projects into commercial service.
In its filing to Ferc, Magnolia LNG cited several factors – the global Covid-19 pandemic, short-term over-supply across the global LNG market and disruptions impacting China-US LNG trade – that have prevented it from entering into long-term offtake contracts with international customers and reaching a final investment decision (FID).
Still, as the over-supply eases, Glenfarne is confident Magnolia LNG will remain a competitive project, largely due to its direct access to “consistently low-priced feed gas” via KMLP.
“Glenfarne is committed to the success of the Magnolia LNG project and is actively working to develop the Magnolia LNG project, including deploying an expanded, combined Glenfarne and Magnolia business development team to secure offtake contracts and engaging in negotiations and contracting with major construction service providers, potential equity investors and local counterparties,” the Ferc filing stressed. “Supported by Glenfarne’s commitment, Magnolia LNG is confident that it will execute commercial agreements that will support a positive FID within this requested timeframe.”