Australian public listed company, Liquefied Natural Gas Ltd. (LNG Ltd.) has signed the heads of agreement (HOA) to supply LNG to India for 20-years from its Magnolia LNG project in the US.
LNG Ltd. in a statement said that they signed a HOA with Vessel Gasification Solutions, Inc (VGS) for supplying LNG for 20-years, of four million tonnes a year from its Lake Charles, Louisiana, project. It said that the non-binding HOA provided a Free-on-Board (FOB) Sale and Purchase Agreement (SPA) for 20-year up to 4 million metric tonnes per annum of liquefied natural gas.
The Indo-American company, VGS Group, is reportedly constructing a LNG floating import and regasification unit at offshore Kakinada, Andhra Pradesh. VGS President, Gaurav Tiwari, said that VGS was in a prime position to execute on the first-mover advantage on the East Coast of India. The two states of the project have phase one of building a Floating Storage Regasification Unit (FSRU) having a 4.47 million tonnes capacity, with the second phase of 8.94 million tonnes. In a statement, VGS said that it was targeting to be the first import facility on the east coast of liquefied natural gas (LNG).
The statement also added that the obligations of the parties were conditional upon Magnolia LNG, the LLC’s satisfaction with or waiver of conditions include Kakinada terminal’s financial close and satisfaction by VGS of credit requirements which underpinned their LNG purchases within agreed time frames.
Magnolia LNG (MLNG) is an exporter of 8 million tonne or more LNG per annum in Lake Charles, Louisiana. Managing Director & CEO LNG Limited, Greg Vesey, said that they looked forward to supplying the Indian market with long-term volumes to meet their growing needs for clean energy. He added that this agreement represented a step forward for the MLNG Project.
Tiwari said that they were excited to take a step forward with Magnolia and looked forward to team-up to bring a significant tranche of US-produced LNG to the new market on India’s East Coast.
Magnolia LNG reportedly proposed to construct up to four liquefaction production trains, which would feature ease of transportation having a capacity of up to 2 million tonnes per annum of natural gas into liquid fuel (LNG). The statement also added that MLNG had the requisite approvals to export gas to FTA and non-FTA nations. It added that the final investment decision and the construction initiation were expected after execution of sufficient off-take agreements that would support financing.