Liquefied Natural Gas Limited (ASX:LNG; OTC ADR:LNGLY) has extended the lease agreement for its Fisherman’s Landing LNG project in Gladstone, Queensland, to 31st March 2016, for $1 million.
It has also received from the Queensland Government an extension to 31st December 2017 for completion of project construction.
The extension of the lease with Gladstone Ports Corporation reflects the existing option provision within the GPC Site Agreement for Lease.
LNG Ltd continues to investigate opportunities for gas feed stock to Fisherman’s Landing while discussions with potential LNG buyers supplying the Asian market are ongoing.
No significant capital commitment to Fisherman’s Landing will occur until binding agreements for gas supply and offtake are materially advanced.
Personnel resources associated with the Magnolia LNG and Bear Head LNG Projects are independent of the Queensland project.
The company will consider all project financing options and strategic partnerships including the possible sale of a minority interest in Fisherman’s Landing.
“The extension of the Site Agreement for Lease with the Gladstone Ports Corporation, and the extension of the dates for completion of construction in the PFL 18 and PPL 161 licenses associated with the proposed LNG Facility at Fishman’s Landing, Gladstone, are steps towards recommencing the development of the FLLNG Project,” managing director Maurice Brand said.
“The Board’s decision to continue progressing the FLLNG Project will not compromise delivery of Magnolia LNG Financial Close or progress on the development of Bear Head LNG.
“Shareholders should be aware precedent steps need to be finalised before material FLLNG activity recommences including execution of legally binding contracts for: (i) gas sales agreement; (ii) offtake agreement; (iii) engineering, procurement, construction and commissioning services; and (iv) procuring project financing (both equity and debt).”
Fisherman’s Landing LNG Project
Fisherman’s Landing is a proposed mid-size 3.8Mtpa liquefied natural gas liquefaction plant on a 24 hectare mainland site in the Port of Gladstone in Queensland.
Construction of the project is expected to take about 36 months from Financial Close.
LNG Ltd plans to apply a similar tolling business model for FLLNG to that applied for its Magnolia LNG and Bear Head LNG projects in North America.
Under this model, it takes no commodity risk and receives a fee to provide all liquefaction and LNG storage services.
This model allows the company to receive a monthly fee, typically over a 20 year term, with the toller contractually responsible for supply and transport of the gas to the FLLNG plant as well as for LNG sales and transport to LNG buyers.
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