Singapore company wants to buy Magnolia LNG developer

(Courtesy Magnolia LNG)

A private liquefied natural gas firm from Singapore wants to buy LNG Limited, an Australian company that hopes to build the Magnolia LNG export terminal in Louisiana, the Houston Chronicle reports.

The tentative $75 million deal requires approval of LNG Limited shareholders, who would receive 13 cents per share.┬áLNG Limited’s board of directors recommends that shareholders OK the sale.

In late January, the company said the additional cash was needed “in order to maintain operations as a going concern.” Since then, S&P Global Platts reports, global LNG markets have faced increasing pressure from low international prices, weaker-than-expected demand in key end-user markets and trade flow restrictions from the deepening global crisis over the coronavirus outbreak. Its US shares have traded below $1 since last May.

The Federal Energy Regulatory Commission in April 2016 permitted the proposed Magnolia LNG project to produce 8 million metric tons of liquefied natural gas per year. LNG Limited’s request to boost production by 800,000 metric tons is pending, although regulators have concluded in an environmental impact report that it poses minimal risk.

LNG Limited has yet to reach a final investment decision on Magnolia LNG and has only landed a tentative supply deal for one-fourth of the proposed plant’s production with a buyer from Vietnam.

The Houston Chronicle has the full story.