LNG Limited’s unit Magnolia LNG has executed a technical services agreement with Kellogg Brown & Root, a KBR unit, to undertake cost verification and provide other services supporting the Magnolia project delivery.
It is proposed that KBR and SK E&C Group will form an integrated EPC joint venture which will execute a bankable EPC contract following the formation of the EPC JV. In addition, both companies will work collaboratively going forward to complete the scopes of services provided under the respective TSA Agreements.
Furthermore, Magnolia LNG and SKEC have initialled the updated EPC contract as originally planned, which incorporates all requirements stipulated by BNP Paribas, Magnolia’s project finance advisor, Merlin Advisors, the lenders’ technical consultant, legal advisors White and Case and Stonepeak Partners, the proposed Magnolia LNG Project Equity partner. KBR will further review and advise on this updated contract consistent with joining the project as a contractor joint venture partner. SKEC’s participation as a member of the integrated EPC contractor joint venture will be finalized through establishment of the EPC Contractor memorandum of understanding to be executed in January among the parties MLNG, SKEC and KBR.
During the period through to 31 March 2015, SKEC and now with KBR, will be working with MLNG on costs and timing for Magnolia LNG to expand through to its full production capacity of 8 mtpa in the 4‐train facility.
MLNG’s Chief Operating Officer, John Baguley said, “With the project now further advancing towards EPC, we are pleased to have KBR’s additional experience and resources available as we finalize the EPC Contract and project related activities towards our planned financial close in mid‐2015.”
Baguley added that the period from now through to 31 March 2015, during which LNG Limited will merge the Provisional Sum elements into the combined lump sum, fixed price contract, will position Magnolia LNG to rapidly enter into the construction phase as necessary approvals and licenses are received. This period will also enable the company to incorporate any comments received from FERC during their preparation of the Draft Environmental Impact Statement, and to undertake the necessary rigorous planning and scheduling required to support achieving first LNG in 2018.
The original SKEC project schedule and budget covering the period through to 30 June 2015 remain on target.
Press Release; Image: LNG Limited