LNGL, Delta Offshore Energy Extend their Agreement
Perth, Oct 11, 2019 AEST (ABN Newswire) - Liquefied Natural Gas Limited (
ASX:LNG) (LI5:FRA) (LNGLY:OTCMKTS) through its 100% owned project company, Magnolia LNG LLC (Magnolia), and Delta Offshore Energy Pte Ltd (DeltaOE) have agreed to extend the validity date of their agreed upon non-binding Term Sheet until July 1, 2020 by entering into an Amended and Restated Memorandum of Understanding. The parties also agreed to use reasonable efforts to negotiate and reach agreement on the terms and conditions of a definitive binding sale and purchase agreement (SPA) by May 31, 2020.
Additionally, the previously agreed SPA condition precedent requiring "Financial Close" has been amended and will instead be conditional only on the Company making a "Financial Investment Decision" in relation to the Magnolia liquefaction project by August 31, 2020. A Financial Investment Decision is dependent upon Magnolia securing sufficient offtake agreements to support financing. All dates may be waived or extended by agreement between the parties.
"We feel that the extensions will provide LNGL and Delta Offshore Energy with more than adequate time to finalize terms for what will be the first long-term sale and purchase agreement for LNG to Vietnam," said Greg Vesey, Managing Director and CEO, LNG Limited.
The Term Sheet details material terms of the proposed liquefied natural gas (LNG) SPA having a target commercial start date of no later than June 1, 2024 (which may be adjusted by Magnolia by +/- up to 7 months). DeltaOE and Magnolia are obligated to use reasonable efforts to negotiate and agree the binding terms and conditions of the SPA pursuant to which Magnolia will supply two (2) million tonnes per annum (mtpa) of LNG to DeltaOE for a term of at least 20 years. The proposed volume of 2 mtpa represents 25% of Magnolia's current nameplate capacity of 8 mtpa (to be increased to 8.8 mtpa subject to Federal Energy Regulatory Commission (FERC) approval). Pricing under the proposed SPA remains as set out in the earlier Term Sheet.
Execution of the SPA (which will remain subject to the "Financial Investment Decision" condition precedent referred to above) will take place once the SPA terms are finalized and agreed and once DeltaOE obtains the necessary government and regulatory approvals for the integrated project, including the official notification of the project into Vietnam's national power development plan (Power Development Plan 7 revised).
For more information on Delta Offshore Energy and their proposed 3,200-megawatt LNG-to-power project in Vietnam, visit www.deltaoe.com.
ABOUT DELTA OFFSHORE ENERGY
Delta Offshore Energy PTE LTD is a Singapore registered company focused on project origination and development in clean energy.
Delta Offshore Energy PTE LTD signed a Memorandum of Understanding in July 2018 with the Bac Lieu Province People's Committee for the development and operation of an integrated 3.2 GW onshore power plant and supporting facilities including a floating LNG receiving, storage, regasification terminal, and pipeline.
About Liquefied Natural Gas Ltd
Liquefied Natural Gas Limited (
ASX:LNG) (OTCMKTS:LNGLY) (LNGL) is an ASX listed company whose portfolio consists of 100% ownership of the following companies:
- Magnolia LNG, LLC (Magnolia LNG), a US-based subsidiary, which is developing an eight mtpa or greater LNG export terminal, in the Port of Lake Charles, Louisiana, USA;
- Bear Head LNG Corporation Inc. (Bear Head LNG), a Canadian-based subsidiary, which is developing an 8 – 12 mtpa LNG export terminal in Richmond County, Nova Scotia, Canada with potential for further expansion;
- Bear Paw Pipeline Corporation Inc. (Bear Paw), which is proposing to construct and operate a 62.5 km gas pipeline lateral to connect gas supply to Bear Head LNG; and
- LNG Technology Pty Ltd, a subsidiary which owns and develops the Company's OSMR® LNG liquefaction process, a midscale LNG business model that plans to deliver lower capital and operating costs, faster construction, and improved efficiency, relative to larger traditional LNG projects.
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