Oz LNGL to Sell Magnolia LNG for $2.25mn

Troubled Australian LNG project developer Liquefied Natural Gas Limited (LNGL) has agreed to sell the Magnolia LNG project to Global Energy Megatrend, a London-based private energy infrastructure firm, for US$2.25mn, the company's voluntary administrators said on May 12 in a statement.

The company has entered into a binding sale transaction in respect of its interest in subsidiary entities that own and operate the Magnolia LNG project, including Pecan (and its subsidiaries), LNG Management Services and LNG Technology. The deal, which is expected to close by May 15, also includes Magnolia LNG's 16 employees and the optimised single mixed refrigerant liquefaction technology that would be used at the proposed terminal.

Earlier this month, LNGL appointed PricewaterhouseCoopers Australia as voluntary administrators of the company. The development came soon after Singapore’s LNG-9 withdrew its US$75mn offer to acquire LNGL. The company was also unable to secure bridge financing from First Wall Street Capital Corp. Post the deal, liabilities associated with Magnolia LNG will pass to Global Energy Megatrend. 

LNGL is developing the 8mn mt/yr Magnolia LNG export terminal in Louisiana and the 8-12mn mt/yr Bear Head LNG terminal in the eastern Canadian province of Nova Scotia, as well as the 62.5-km Bear Paw pipeline to connect gas supply to Bear Head. The Global Energy Megatrend deal does not include its interest in the business and assets of the Bear Head LNG project, which remain owned by entities controlled by the company.

As per the statement, while the LNGL's patented optimised single mixed refrigerant liquefaction process technology will be sold as part of the transaction, the Bear Head LNG project will retain a perpetual licence to use that technology.