Liquefied Natural Gas (LNG) has announced that its 100%-owned subsidiary Magnolia LNG (MLNG) has signed a heads of agreement (HOA) with Vessel Gasification Solutions (VSG) in relation to the Magnolia LNG Project in Lake Charles, Louisiana, US.
The HOA provides for a 20-year free-on-board (FOB) sale and purchase agreement (SPA) of up to four million metric tonnes per annum (mtpa).
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The deal is subject to MLNG’s satisfaction with or waiver of conditions precedent, including the financial close of the Krishna Godavari LNG Terminal (KGLNGT) and satisfaction by VGS of defined credit requirements with regard to the LNG purchases within the stipulated time.
LNG managing director and CEO Greg Vesey said: “We look forward to supplying long-term volumes to the Indian market to meet their growing needs for clean energy. Overall, this agreement represents another important step forward for the MLNG Project.”
The VGS Group is constructing a floating LNG import and regasification terminal situated at Kakinada Deepwater Port in Andhra Pradesh, India.
After development, this terminal will be the first LNG import project in the eastern coast of India. It will serve the industrial Andhra Pradesh-Orissa coastal region with a high energy requirement.
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By GlobalDataVGS president Gaurav Tiwari said: “With the execution of this agreement, VGS is now in a prime position to execute on the first mover advantage we have established on India’s East Coast.
“We are very excited to take this step forward in our relationship with Magnolia, and we look forward to working with the Magnolia team to bring a significant tranche of US-produced LNG to a key new market on the East Coast of India.
Magnolia LNG intends to develop and operate up to four liquefaction production trains with a capacity of 2mtpa by utilising its OSMR LNG process technology.
According to the plan, it will construct two 160,000m3 full containment storage tanks, as well as ship, barge and truck loading facilities and supporting infrastructure.
The company has also secured necessary approvals for this project and will initiate construction after the execution of offtake agreements to support financing.
