US-China Trade Spat Delays Magnolia LNG FID

The ongoing trade dispute between the US and China on October 29 forced Australia’s LNG Limited (LNGL) to announce October it would delay a final investment decision on its 8mn metric tons/year (mt/yr) Magnolia LNG project in Louisiana until “the first part of 2019.”

“Earlier this year, we stated our target to make a final investment decision by the end of the 2018 calendar year,” LNGL CEO Greg Vesey said in a quarterly statement. “We made that statement prior to the trade tensions that have manifested over the past months, which have caused headwinds for LNG transactions.”

Vesey said there were “varying opinions” as to how and when the trade issues between the US and China would be resolved, but until then, communications with potential Chinese offtakers of Magnolia LNG capacity are continuing, and the company intends to “complete agreements if trade tensions abate before Magnolia is fully sold out.”

So far, LNGL has an offtake agreement with Meridian LNG Holdings for 2mn mt/yr of LNG from Magnolia and a heads of agreement with India’s Vessel Gasification Solutions four 4mn mt/yr, which has yet to be converted to a contract.