LNG delays Magnolia go-ahead

MELBOURNE: Australia-listed LNG Ltd said yesterday it is delaying a final decision on whether to build its Magnolia LNG plant to next year as it has run into problems lining up customers in China, knocking its shares down 28 per cent.

LNG had planned to make a final investment decision by yearend on Magnolia, which would be designed to produce eight million tonnes of liquefied natural gas a year.

“We made that statement prior to the trade tensions that have manifested over the past months, which have caused headwinds for LNG transactions,” said LNG chief executive officer Greg Vesey in a quarterly report.

The company was targeting final approval for the Magnolia LNG project in Louisiana, the United States, in “the first part of next year”, depending on how talks to line up contracts went, he said.

“While trade issues with the Chinese market impact our discussions, our negotiations with customers in other parts of the world remain strong.”

The company is developing two plants — Magnolia, from where it hoped to begin exports in 2022, and another in Nova Scotia in Canada.

“Considering that, our communications with potential Chinese offtakers remain robust with the intent to complete agreements if trade tensions abate before Magnolia is fully sold out,” he said.