Magnolia LNG signs pipeline capacity agreement with KMLP

Magnolia LNG, the wholly owned subsidiary of Australia-based Liquefied Natural Gas, has agreed a pipeline capacity agreement with Kinder Morgan Louisiana Pipeline (KMLP).

Known in the US as a precedent agreement (PA), it secures sufficient firm gas transportation service rights for the full eight million tonnes per annum (mtpa) capacity of the company’s project at Lake Charles in Louisiana, US.

The execution of the agreement is the fourth major milestone for the MLNG project, following on from a lease option agreement with the Lake Charles Harbour and Terminal District, LNG Export approval from the Department of Energy and Office of Fossil Energy, and an equity commitment agreement with Stonepeak Partners.

According to Magnolia LNG, the agreement provides firm gas transportation rights for each of the four LNG trains that are proposed for the project, from various receipt points along the existing KMLP pipeline to the project site.

KMLP will execute multiple firm transportation service agreements for the MLNG project upon satisfaction of the conditions precedent in the PA.

The company will also file an application with the Federal Energy Regulatory Commission (FERC) in a bid to provide transportation services to install new pipeline compression facilities and additional pipeline and interconnect facilities.

Liquefied Natural Gas managing director Maurice Brand said that one of the MLNG project site’s main benefits is that the existing KMLP pipeline directly transverses the site.

"This has directly assisted the Company in developing the MLNG Project in a timely and cost-effective manner and will materially contribute to the MLNG Project potentially being in the first five US LNG export projects to achieve commercial operations," Brand added.

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Image: Layout of the Magnolia LNG project. Photo: courtesy of Liquefied Natural Gas Limited.