Federal regulators have issued a draft environmental assessment for the updated Magnolia liquefied natural gas export facility in Louisiana after the project's developer predicted an uplift in capacity.
Developer LNG Ltd is already authorised to build an 8 million tpa facility at the Magnolia LNG site in Lake Charles. However, the company submitted a request late last year to amend its authorisation to expand the terminal's capacity to 8.8 million tpa "through the optimisation of its final design". The increase in capacity would not require an increase in authorised feed gas rates, according to Federal Energy Regulatory Commission documents.
In the draft environmental report released Friday, Ferc concluded that the change in production capacity "would continue to avoid or reduce impacts to less than significant levels" as long as the developer follows recommended mitigation measures. The measures, which include filing additional information and making sure equipment meets certain requirements, are to be attached as conditions to Ferc's authorisation of the capacity expansion.
A final environmental assessment is due in late January of next year with final authorisation expected in late April.
LNG Ltd recently announced its first commercial offtake agreementfor Magnolia LNG, which will supply roughly 2 million tonnes of LNG per annum to Delta Offshore Energy for an LNG-to-power project in Vietnam’s Bac Lieu province. The deal, which is still subject to a sale and purchase agreement, would deliver the volumes on a free-on-board basis for 20 years, with options to extend the term.
The deal followed an update to LNG Ltd's existing engineering, procurement and construction agreement for Magnolia LNG ith its contractor, a KBR and SK E&C joint venture. The amended contract accounts for updated subcontractor pricing, costs associated with increasing the liquefaction capacity, and additional scope of work.
The KBR-led joint venture was originally awarded the contract in 2015 and the validity period has been extended several times. The new contract is now valid until 31 December 2019.
The proposed Magnolia LNG project will have initial capacity to produce 4 million tpa of LNG from two modules, which could be expanded with two additional units in a later phase development.
