LNG Ltd (Australia) has signed a non‐binding Tolling Heads of Agreement (HOA) with Gas Natural Fenosa (GNF), in relation to its fully-owned Magnolia LNG Project, in Louisiana, USA. The term of the HOA is to 30 June 2014 and, under the provisions of the HOA, GNF will now undertake detailed due diligence of the MLNG Project and the Company will prepare the first draft of the proposed definitive Tolling Agreement (by no later than 31 October 2013). The Tolling Agreement will be between GNF and the Company’s wholly owned project company, Magnolia LNG.
The HOA provides for a proposed 20 year Tolling Agreement, including firm LNG production capacity of up to 1.7 Mt/year and additional interruptible capacity. Under the proposed Tolling Agreement GNF will be responsible for delivery of gas, including gas usage for the LNG plant, at its own expense, to the MLNG Project for liquefaction, storage, and delivery onto LNG ships arranged or designated by GNF. In consideration of MLNG’s provision of the tolling services, GNF will pay to MLNG a fixed monthly capacity fee, over the 20 year tolling term, and other fees in relation to the MLNG Project’s fixed and variable operating and maintenance costs.