Australia's LNG Signs Up Gas Natural for US Export Project

   By Stephen Bell 
 

SYDNEY--Australia's Liquefied Natural Gas Ltd. (LNG.AU) said it has signed a second customer for its proposed Magnolia gas processing venture in the U.S. after agreeing a sales deal with Spain's Gas Natural SDG SA (GAS.MC).

The initial agreement involves Gas Natural sourcing natural gas from shale fields that can be processed at Liquefied Natural Gas Ltd's plant in Louisiana state. Gas Natural will then have the right to take up to 2 million metric tons of liquefied natural gas each year to sell to users.

According to the deal terms, Gas Natural will pay LNG Ltd. a monthly capacity fee, and fund some of the operating and maintenance costs.

Liquefied Natural Gas Ltd. aims to use its own liquefaction technology for Magnolia. The plant's first phase will cost around US$2.2 billion and produce around 4 million tons a year of LNG.

The plant would be built near LNG shipping channels in the Lake Charles District of Louisiana.

The deal increases Gas Natural's exposure to the emerging U.S. gas-export sector, as the Spanish energy group is one of the foundation customers for Cherniere Energy Partners' Sabine Pass gas export project, also in Louisiana.

Last month, Liquefied Natural Gas Ltd. signed a similar deal over Magnolia with a unit of Gunvor Group, a commodities trader.

-Write to Stephen Bell at [e-mail]

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