LNG%20Annual%20Report%202015.pdf
2015
Annual Review
Liquefied Natural Gas Limited
ABN 19 101 676 779
Annual Review 2015
Our Logo
We chose the 'RED ANT' as our logo because it is distinctive and bold and represents strength, energy, hard work and perseverance characteristics we want to be trademarks of our corporate culture.
Our Mission
Our mission is to create substantial shareholder value through successful execution of our 'Energy Link' strategy, distinguishing LNGL as a pure LNG infrastructure investment opportunity. This entails safely developing mid-scale, low cost, efficient and reliable LNG liquefaction terminals to serve
the international energy market's demand for natural gas. This integrates demonstrated skills
in identifying and securing strategically located project sites, with development of these sites in a rapid, cost effective manner.
Our Business Model
Our business model applies the Company's wholly owned and developed OSMR® LNG process, which centres on delivering four key principles: industry competitive capital cost; optimised plant
energy efficiency; shortened development and construction schedules; and an overall smaller environmental impact footprint, including reduced carbon emissions relative to other LNG technologies.
Liquefied Natural Gas Limited (LNGL) is an Australian public company based in Perth, Western Australia.
Our business is to bring a dynamic concept of mid-scale liquefied natural gas ('LNG') projects to
the international energy market.
Contents
2 Chairman's Report
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Highlights of the Year
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Managing Director and
Chief Executive Officer's Report
-
Financial Summary
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Corporate Directory
Liquefied Natural Gas Limited
Annual Report 2015 1
Energy Link Strategy
The Company's 'Energy Link' strategy is to safely develop mid-scale LNG export terminals to link proven gas reserves with existing LNG buyers.
We aim to remain at the forefront of approach to LNG development and processing technology to
ensure the Company's LNG terminal development projects are world competitive in terms of capital
and operating costs, operating efficiencies, and environmental impact. We seek to ensure our neighbouring communities benefit from our operations on an enduring basis while we minimise and mitigate any potential impact of our presence.
The realisation of these strategic goals is supported by:
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Our approach to project identification and development,
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Our engineering, procurement and construction (EPC) strategy; and
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Our application of the patented optimised single mixed refrigerant (OSMR®) technology supports realisation of these strategic goals.
Liquefied Natural Gas Limited
2 Chairman's Report
Chairman's Report
Welcome
to our 2015 Annual Review.
I am pleased to introduce the 2015 Liquefied Natural Gas Limited (LNGL or Company) Annual Review.
Liquefied Natural Gas Limited
Our Company has made further substantial progress during the year with our key projects involving the 8 mtpa Magnolia LNG project (Magnolia LNG), located
in Lake Charles, Louisiana, USA and the 8 mtpa Bear Head LNG project (Bear Head LNG), located at Point Tupper, Nova Scotia, Canada.
Despite the challenging environment of low oil prices and a slowdown in Asian and European economies, which have more recently affected global capital markets, LNGL has delivered significant milestones, which are summarised in the Managing Director and Chief Executive Officer's Report.
LNGL's 'Energy Link' strategy aims to safely develop mid-scale LNG export terminals
to link proven gas reserves with existing LNG buyers. The Company's wholly owned optimised single mixed refrigerant (OSMR®) liquefaction technology aims to deliver lower capital and operating costs, faster construction timelines, improved efficiency, and environmental benefits relative to traditional configurations. This LNG technology platform, along with our unique modular design and construction methods, provide compelling competitive advantages, which will allow the Company to build, own, and operate LNG facilities on strategically located sites. In a world where natural gas is increasingly the preferred energy choice, LNGL is well positioned
to fulfil our mission of achieving market leadership in the mid-scale LNG sector.
In line with our strategy of acquiring new, strategically located project sites where we can fast track projects by substantially replicating our existing engineering, commercial, and financial work and knowhow, we acquired the Bear Head
LNG project in Nova Scotia, Canada, which further advances our strategy of becoming a recognised leader in the North American LNG sector.
LNGL continues to investigate other opportunities in North America, and elsewhere, to implement its strategy in a disciplined manner with a focus on shareholder returns.
To support the continuing development of our North American projects and
advancement of LNGL's strategy, a number of Board of Directors (Board) and executive management team appointments were made during the year.
Board Developments
We welcomed Paul Cavicchi as the Company's first non-executive United States (U.S.) director effective 1 October 2014. Based in Houston, Paul brings over 30 years leadership experience in the international energy industry across a range of gas and power projects, which include development and construction
of LNG infrastructure. Paul's most recent executive position was as Executive Vice President of GDF SUEZ Energy North America, Inc.
In February 2015, LNGL welcomed the appointment of Michael Steuert as the Company's second non-executive U.S. director. Mike was the Chief Financial Officer and Senior Vice President
and Controller at Fluor Corporation from May 2001 until his retirement in May 2012. His focus was on risk and project management, Sarbanes Oxley,
compliance and ethics, capital structure, and development of a world-class finance function. Mike also holds Board positions with Weyerhaeuser Corporation, and Kurion Inc.
I would like to thank Madam Yao Guihua (Grace) who has been a Non-Executive Director since August 2013 when her employer China Huanqiu Contracting and Engineering Corporation (HQC) was a major shareholder in the Company.
Annual Report 2015 3
Richard Beresford
Chairman
Grace will step down from the Board immediately following the Annual General Meeting on 19th November 2015. It has been a pleasure having Grace on the Board and we look forward to continuing the close relationship with HQC in pursuit of joint LNG opportunities.
Executive Management Team Appointments
LNGL welcomed the appointment of Mike Mott as LNGL's Chief Financial Officer, based in Houston, Texas.
Mike was previously employed by BG Group from 2003, where he held a number of senior finance, strategy and operations roles. Prior to BG
Group, Mike held progressively senior accounting and risk management roles for Dynegy Inc. from 1995, becoming SVP - Chief Accounting Officer and Controller from 2001
to 2003. He spent thirteen years with Price Waterhouse LLP before joining Dynegy.
More recently, LNGL welcomed the appointment of Ms Kinga Doris as General Counsel and Joint Company Secretary, based in Houston. Kinga is responsible for all statutory, securities, regulatory and other legal activities of the LNGL group as well as management of outside legal counsel across all operations and global project activities.
Kinga has 20 years of experience advising global energy companies in various capacities including corporate law, securities, corporate finance, and M&A.
On 26 September 2014, LNGL announced that the Employment Agreement for the current Managing Director/Chief Executive Officer,
Mr F Maurice Brand had been extended to 30 June 2017.
Market-facing Developments During the 2015 financial year, LNGL's market capitalisation increased from
$955.5 million as at 1 July 2014 to over $1.9 billion at 30 June 2015. The increasing market capitalisation reflects the strong support the Company continues to receive from our new and existing institutional investors, as well as a strong retail investor base that has resulted in a
total number of shareholders of 8,290 at the date of this Report. As at the date of this report, LNGL's market capitalisation was approximately
$700 million reflecting the decline in the broader equity markets. LNGL announced that the Company had been included in the S&P/ASX 200 Index and S&P/ASX 300 Index, as well as the S&P/ASX All Australian Index. This was an important milestone for LNGL.
During the 2015 financial year, LNGL raised $212.7 million gross through two share placements, which attracted significant interest from a large number of institutional investors from North America, Australia and Asia. Proceeds from the capital raisings were used to fund the development of the Magnolia LNG project, the acquisition, permitting and initial front end engineering and design (FEED) work on the Bear Head LNG project, undertake due diligence on a third possible North American LNG project, and for general working capital purposes.
The LNGL Board has advised that LNGL will likely list on an appropriate
U.S. exchange near the time of commencement of full construction of the Magnolia LNG project, resulting in a dual listing with its existing shares on the ASX.
At this stage, the Board has made no decisions as to whether to list on a U.S. exchange or as to the exact timing of such listing. The Company
will consider further options to unlock value for all LNGL shareholders at the North American asset or project level.
Developments in Corporate Governance
During the financial year, the Board of LNGL in conjunction with Executive Management performed substantial work to further develop
the Company's corporate governance policies, procedures, and reporting requirements, which are reflected
on our website and in the 'Directors' Report' and 'Corporate Governance' sections of this Annual Report. This work will continue in preparation
for the potential dual listing of the Company in 2016.
On behalf of the Board, we especially thank our Managing Director /
Chief Executive Officer Maurice Brand for his energy, hard work and commitment in achieving the targets we set and getting the Company
to where it is today. Maurice is supported by a dedicated and highly capable executive team, and I extend the Board's thanks to each
for their strong drive to achieving the Company's goals.
The Company is well positioned to pursue further growth and
development boldly, strategically and responsibly to deliver the highest value we can achieve for you, our shareholders.
Thank you for your continuing support.
Richard Beresford
Chairman
29 September 2015
Liquefied Natural Gas Limited
4 Highlights of the Year
Highlights of the Year
Financial Highlights
Total assets ($m's)
Net cash ($m's)
200
$
196m
200
$
181m
150
150
100
100
50
50
0 0
11 12 13 14 15 11 12 13 14 15
Shares on issue ($m's)
Market capitalisation ($m's)
600
$
503m
2000
$
1.91b
500
1500
400
300
1000
200
500
100
0
0
11 12 13 14 15 11 12 13 14 15
Liquefied Natural Gas Limited
Review of Operations
Annual Report 2015 5
Managing Director and
Chief Executive Officer's Report
Review of Operations
Fiscal 2015 was a year of opportunity, change,
and challenge for LNGL, during which we materially advanced our North American opportunities, and enhanced our corporate and project resource skills and capabilities through key personnel additions, while contending with a significant fall in oil prices, a weakening global economy, and a short-term slowing in demand for LNG.
FM (Maurice) Brand
Managing Director/Chief Executive
In pursuing our business strategy, we laid important foundations for future growth and success.
The foundations, revealed in the following key highlights1 realised during the year, reflect a rapid advancement of the Magnolia LNG project towards financial close in 2016, the acquisition and aggressive development of the Bear Head LNG project, and solidification of our technology advantage through additional approved OSMR® patents.
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U.S. Federal Energy Regulatory Commission (FERC) issued Notice of Schedule for Environmental Review (SER) and Draft Environmental Impact Statement (DEIS) to Magnolia LNG
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Magnolia LNG signed a legally binding tolling agreement with Meridian LNG Holdings Corp (Meridian LNG) for firm capacity rights for up to 2 mtpa for an initial term of 20 years
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EPC contract terms and conditions agreed between Magnolia LNG and KSJV, a joint venture between KBR, Inc. (KBR) and SK E&C USA, Inc. (SKEC)
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Global alliance announcements with Chart Industries (Chart), Siemens Energy Inc. (Siemens), and EthosEnergy Group (EthosEnergy) that provide key materials, components and services to the future construction and operation of Magnolia LNG and, potentially, other future LNGL opportunities
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Clough-CH IV selected as owner's engineer for the Magnolia LNG project
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Acquired the Bear Head LNG project in Richmond County, Nova Scotia, Canada for US$11.0 million
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Bear Head LNG obtained all 10 of the initial federal, provincial, and local regulatory approvals needed to construct a LNG facility on the Strait of Canso in Nova Scotia
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U.S. Department of Energy (DOE) granted Bear Head LNG authorisation to export up to 440 billion cubic feet (bcf) per year of
U.S. natural gas to Canada, and up to 8 mtpa of LNG from Canada to free trade agreement (FTA) countries
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FERC recognised Bear Head LNG as an 'approved' Canadian LNG export terminal project
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Canada's National Energy Board (NEB) granted authorisation to export up to 8 mtpa of LNG from Bear Head LNG's project site starting in 2019, with expanded authority to 12 mtpa in 2024, and a license to import 1.2 bcf/day
of natural gas from the U.S., an amount adequate to produce the authorised annual LNG exports
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Bear Head LNG followed the First Nations consultation process
and signed a Memorandum of Understanding with the Assembly of Nova Scotia Mi'kmaq Chiefs
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OSMR® technology patent granted in the U.S., Canada and other countries.
1 Includes announcements post 30 June 2015
Liquefied Natural Gas Limited
6 Review of Operations
Managing Director and
Chief Executive Officer's Report
continued
In addition, during 2014/15, we materially advanced our focus on corporate governance, sustainability, diversity, and our approach to safety and asset integrity, bringing to the forefront these important corporate attributes.
LNGL's Business Principles guide our decisions, actions and behaviours. Our core business is
safe development of mid-sized LNG projects that will offer natural gas to meet a growing international energy demand. Effective management of key risks are critical to the successful implementation of our strategy in addition to protecting the interests
of LNGL's shareholders and other key stakeholders, which includes our employees, business partners, and
the communities in which we operate.
Our risk management procedures and processes are designed to enable realisation of these goals.
We are laser focused on delivering the immediate Magnolia LNG project milestones of finalising our EPC contract pricing and executing binding offtake agreements for
the remaining 6 mtpa of capacity. Concurrently, we remain vigilant in advancing the successes to date by identifying and procuring pipeline capacity and gas supply to unlock the Bear Head LNG value proposition, and to continue our efforts to
identify gas supply for Fisherman's Landing LNG.
We also continue to evaluate additional growth opportunities that would benefit from our Energy Link strategy.
Business discussion and analysis
The following discussion and analysis of our operations, financial condition, and results of operations should be read in conjunction with our financial statements and the related notes to those statements included elsewhere in this Annual Report. In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our results and the timing of selected events may differ materially from those anticipated in these forward-looking statements
as a result of many factors.
Magnolia LNG Project Louisiana, USA
Project Overview
The Magnolia LNG project comprises the proposed development of an 8 mtpa LNG export project on a 115 acre site, in an established LNG shipping channel (along the Calcasieu River shipping channel)
The project is based on development of four LNG production trains of 2 mtpa each using the Company's wholly owned OSMR® LNG process technology. The site lease is with the Lake Charles Harbour and Terminal District, encompassing a 30-year lease agreement, with
four 10-year options for Magnolia LNG to extend the term of the lease for up to 70 total years.
in the Lake Charles District of Louisiana.
Feed gas supply will come from the highly-liquid U.S. Gulf Coast gas market via several gas suppliers.
Gas supply will be delivered to the site via the Kinder Morgan Louisiana Pipeline (KMLP). Magnolia LNG
has entered into a 20-year binding pipeline capacity agreement with Kinder Morgan Louisiana Pipeline LLC to deliver gas to the site for the full 8 mtpa of the project.
Magnolia LNG signed a binding agreement with Meridian LNG Holdings Corp for firm capacity rights for up to 2 mtpa on 22 July 2015.
Magnolia LNG continues negotiations with a number of other LNG buyers for the purchase of LNG on 20-year terms (with extension options).
Liquefied Natural Gas Limited
Annual Report 2015 7
Project Permits and Approvals
The FERC is the U.S. body that has the responsibility to administer the U.S. National Environmental Policy Act.
The Magnolia LNG project has received its FERC issued SER, setting 16 November 2015 as the anticipated date for issuance of the project's
final environmental impact statement (FEIS). The SER also establishes a 90-day-post-FEIS decision deadline
for all agencies responsible for issuing related federal authorisations.
On 14 July 2014, FERC accepted KMLP's application pursuant
to Section 7(c) of the Natural Gas Act for the Lake Charles
Expansion Project, which includes the installation of compression and other related facilities on the
existing KMLP pipeline, facilitating the full required volumes of natural gas to be transported to the proposed 8 mtpa Magnolia LNG project. KMLP's application seeks FERC's authorisation to construct and operate the Lake Charles Expansion Project.
The FERC approval process for the Lake Charles Expansion Project
is running in parallel with FERC's regulatory review of the Magnolia LNG project. FERC formally accepted the Magnolia LNG application on
15 May 2014.
The DOE is the U.S. responsible body to grant LNG export approvals. DOE has already granted Magnolia LNG authorisation to export a total of 8 mtpa of LNG from the Magnolia LNG project to FTA countries.
Detailed information on the Magnolia LNG project is available on the Company's website: www.lnglimited.com.au under 'Assets' or at www.magnolialng.com
The DOE authorisation is valid for the first LNG sales to commence
within 10 years, and then for a further 25 years from first LNG sales date.
Magnolia LNG has submitted a request for authorisation to export LNG to Non-FTA countries for up to 8 mtpa. Magnolia LNG anticipates a decision by DOE on its Non-
FTA request following receipt of the FERC's final order to proceed with the project.
Liquefied Natural Gas Limited
8 Review of Operations
Managing Director and
Chief Executive Officer's Report
continued
Engineering Procurement and Construction (EPC) Contract In early 2015, KBR joined the Magnolia LNG project as the lead partner in an integrated joint venture with SKEC referred to as the KSJV. Subsequently, Magnolia LNG and KSJV agreed on terms and jointly initialled the EPC contract including terms and conditions, full scope of work, and all supporting contract schedules and attachments.
KSJV will provide LNGL a fixed-price on the full 8 mtpa project, as well as a 6 mtpa project, providing certainty of pricing for a six-month period from the EPC contract's effective date. The two firm KSJV prices allow LNGL flexibility in its FID decision to match a firm EPC contract price with the outcome of ongoing liquefaction capacity marketing efforts without further KSJV negotiations during
the six-month period. As part of the EPC contract, the KSJV will fully guarantee the LNG production and fuel gas efficiency of each train at the guaranteed production rate of 206 metric tons/hour (1.7 mtpa) and fuel gas efficiency of 8%, incorporating the OSMR® process design provided by LNGL.
Magnolia LNG and KSJV continue to progress negotiations on the lump sum, fixed-price turnkey prices and expect to conclude this negotiation and announce signing of the binding contract during the last quarter
of 2015.
Additionally, Magnolia LNG completed a tender process and selected Clough-CH IV to fulfil the role of owner's engineer for the EPC phase of the project. This engagement includes providing technical and project execution support personnel in support of Magnolia LNG as oversight to the KSJV contractor activities as the project moves through detailed
design, construction, commissioning and start up in support of delivering LNG from the first of the four planned 2 mtpa LNG trains.
Liquefied Natural Gas Limited
LNG Offtake Agreements
On 23 July 2015, LNGL announced that Magnolia LNG had
signed a legally binding agreement with Meridian LNG for firm capacity rights for up to 2 mtpa.
Under the liquefaction tolling agreement (LTA), Magnolia LNG will provide liquefaction services to Meridian LNG over the term of the contract in return for monthly capacity payments. Meridian LNG
is responsible for procurement and delivery of feed gas to the liquefaction plant and for arranging all LNG shipping required to transport the LNG from the liquefaction plant to
its customers.
Meridian LNG intends to deliver the LNG to Port Meridian, its Höegh LNG operated floating re-gasification
terminal in the UK, with the re-gasified natural gas delivered to E.ON Global Commodities (EGC) under a 20-year gas sales agreement (GSA) executed and announced by Meridian LNG on 23 April 2015.
Key terms of the LTA include:
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Initial term of 20 years, with option to extend by a further 5 years;
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Firm annual capacity of 1.7 mtpa with a further 0.3 mtpa to be offered at Magnolia LNG's discretion; and
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Conditions precedent, including that Magnolia LNG achieves financial close no later than
30 June 2016.
Marketing of the remaining 6 mtpa of Magnolia LNG capacity continues with a number of investment-grade, as well as some non-investment grade counterparties. Certain negotiations (with investment-grade counterparties) are advanced and progressing through the internal investment decision authorisation process attendant to each counterparty.
Each of the offtake negotiations are for initial 20-year terms, with some taking the form of a liquefaction tolling agreement and some being LNG sale and purchase agreements. Current negotiated pricing remains at levels supporting announced EBITDA guidance of $2.50/mmBtu across the full 8 mtpa project.
Equity Commitment
In 2014 the Company executed an Equity Commitment Agreement (ECA) with New York headquartered Stonepeak Partners LP (Stonepeak). The ECA governs the relationship, cooperation, rights and obligations between Stonepeak and the Company through to Financial
Close. The ECA also incorporates the Magnolia LLC Agreement, which sets out the respective rights and obligations of Stonepeak and the Company from Financial Close, including the construction and funding of the Magnolia LNG project, the management and governance
of the project, the allocation and distribution of future profits, and other related matters.
The Stonepeak commitment remains in place. In light of market interest
in the Magnolia LNG project, LNGL and Stonepeak are undertaking discussions to adjust the original ECA to encompass the full 8 mtpa project in a single phase financing.
Other Matters
On 28 January 2015, LNGL announced that Magnolia LNG had executed a Gas Pipeline Interconnect Agreement (PIA) with KMLP that
sets out the technical scope and specifications for gas supply to the Magnolia LNG plant. The PIA defines each parties' obligations in
relation to the design, procurement, construction, installation, operations, maintenance and ownership of
the facilities. Magnolia LNG has already entered into a legally binding agreement with KMLP to access
1.4 bcf/day of capacity over a 20- year term. This capacity is sufficient for Magnolia LNG to produce its full 8 mtpa design capacity.
Annual Report 2015 9
Bear Head LNG Project Nova Scotia, Canada
Detailed information on the Bear Head LNG project is available on the Company's website: www.lnglimited.com.au under 'Assets' or at www.bearheadlng.com
Project Acquisition and Overview
On 28 July 2014 the Company announced, and subsequently closed in late August 2014, the acquisition of 100% of Bear Head
LNG Corporation (Bear Head LNG) from a subsidiary of Anadarko Petroleum Corporation for US$11.0 million.
The Bear Head LNG project was initiated in 2001 as an LNG import facility. Environmental permits were approved around 2004 and construction began in 2005. Prior owners spent more than US$100
million on development, engineering, and construction before activity ceased in 2007 because of changing energy market dynamics. Site improvements were maintained
and permits were kept active in the intervening years before the 2014 purchase of Bear Head LNG Corporation by LNGL.
The Bear Head LNG project is located in Point Tupper, Richmond County, Nova Scotia, Canada.
Bear Head LNG is developing the proposed LNG export project on the north bank of the Strait of
Canso, which has direct access to the North Atlantic. The Bear Head LNG facility is being designed to produce approximately 8 mtpa of LNG with potential for future capacity expansion.
Project development on a 255- acre site, will include four LNG
production trains, LNG storage tanks, a marine terminal and associated infrastructure. The majority of site preparation and access work is complete. The marine terminal site is on the Strait of Canso, a waterway that is sheltered, remains ice-free, and requires no dredging.
Liquefied Natural Gas Limited
10 Review of Operations
Managing Director and
Chief Executive Officer's Report
continued
The Strait area shipping community is served by established tug, pilot, and marine support operations.
The Bear Head LNG acquisition is in line with LNGL's strategy of acquiring sites where the Company can replicate its Magnolia LNG project approach and fast- track development by using its existing LNGL development team and its OSMR® technology.
Project Management Appointments
With the acquisition of Bear Head LNG Corporation, LNGL appointed Mr. John Godbold and Mr. Ian Salmon to lead development of
the Bear Head LNG project. John previously led LNG development projects for Pangea LNG, Gulf Coast LNG, and El Paso Energy, and developed 50+ bcf of salt dome storage facilities. Ian was previously CFO of Featherwood Capital, RDG Energy Group, and Pangea LNG, and previously worked for El Paso Energy and Morgan Stanley. Both John and Ian have extensive LNG
knowledge and industry relationships. John is responsible for the project and reports to LNGL's Managing Director/Chief Executive Officer Maurice Brand.
Project Permits and Approvals Bear Head LNG requires Canadian federal, provincial, and local regulatory approvals to construct
the proposed export project.
All 10 required initial permits are approved and in place as listed below.
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Environmental Assessment Approval from the Nova Scotia Environment (NSE)
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Permit to Construct from the Nova Scotia Utility and Review Board (UARB)
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Navigable Waters Protection Act Authorisations (Federal Government)
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Transport Canada Canadian Environmental Assessment Agency (CEAA) Screening (Federal Government)
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Fisheries and Oceans Canada CEAA Screening (Federal Government)
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Authorisation for Works or Undertakings Affecting Fish Habitat (Federal Government)
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Environment Act Water Approval
- Wetland Infill (Government of Nova Scotia)
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Breaking Soil of Highways Permit (Government of Nova Scotia)
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Development Permit (Municipality of Richmond County)
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Beaches Act Clearance (Government of Nova Scotia)
On 17 August 2015, Canada's NEB granted Bear Head LNG Corporation and Bear Head LNG (USA), LLC (collectively, Bear Head LNG) authorisation to export LNG. The NEB licencing decision approved Bear Head LNG's application for authority to export up to 8 mtpa of LNG from Canada starting in 2019, with expanded authority to increase production to 12 mtpa in 2024. The export licence extends for a period of 25 years from the date of first LNG export.
The DOE granted Bear Head LNG authority to export U.S. natural gas to Canada and to export LNG
from Canada to FTA countries. This allows export of up to 440 bcf per year of U.S. natural gas to Canada and up to 8 mtpa of LNG to FTA countries. Bear Head LNG has also filed an application with the DOE for authorisation to export to Non- FTA countries.
Bear Head LNG has applied to the DOE for authority to import for subsequent export up to 250 bcf
per year of Canadian natural gas by pipeline that is 'in transit' through the U.S., back into Canada for delivery to Bear Head LNG's proposed liquefied natural gas export facility. This authorisation would allow a portion of the Bear Head LNG's natural gas requirements to come from sources in Western and Central Canada, enhancing commercial supply options. The NEB also granted Bear
Head LNG a licence to import 1.2 bcf/ day of natural gas from the U.S., an amount adequate to produce the authorised annual LNG exports.
Engineering Work
Bear Head LNG has completed initial FEED work with KBR, which
has knowledge of the local site, since they executed the FEED work for Bear Head LNG when it was proposed
as an LNG import facility. KBR leads KSJV, the joint venture for the FEED and EPC contract for the Magnolia LNG project.
Gas Supply
Natural gas supply for LNG exports through Bear Head LNG is expected to come from producers in the
U.S. and Canada. Bear Head LNG continues to progress discussions and negotiations relative to all three potential gas paths: U.S., offshore Nova Scotia, and Western and Central Canada.
Liquefied Natural Gas Limited