New signs point to bankruptcy or liquidation for Magnolia LNG developer

(Courtesy Magnolia LNG)

Australia’s LNG Limited has appointed voluntary administrators from PricewaterhouseCoopers—a sign that the Magnolia LNG developer may be preparing to enter bankruptcy or liquidation, S&P Global Platts reports.

CEO Greg Vesey has also stepped down from the board.

Administration is akin to bankruptcy in Australia. LNG Limited had most recently said it only had enough cash to fulfill its obligations until May.

The developments, announced last week, followed the April 13 withdrawal of a takeover offer for LNG Limited that the company had said was the best chance to save the up to 8.8 million million tons per year export project that it has been pursuing in Louisiana.

S&P Global Platts reports the future of the project and the company’s U.S. operations are not clear. PwC officials were reviewing the parent company’s assets and planned to contact creditors afterward, according to a statement on LNG Limited’s website.

Federal regulators approved construction of Magnolia LNG in 2016. The company secured an engineering, procurement and construction contract, but was unable to reach any firm offtake deals with buyers of the LNG it planned to produce.

Insolvency would trigger contract clauses that could allow counterparties to terminate the project’s EPC contract and its port lease for its 115-acre site along the Calcasieu Ship Channel.

S&P Global Platts has the full story.