LNG Ltd. lets Magnolia LNG technical services agreement

Liquefied Natural Gas Ltd.’s wholly owned subsidiary Magnolia LNG LCC (MLNG) let a technical services agreement to SK E&C USA Inc. (SKEC), a wholly owned subsidiary of SK Engineering & Construction Co. Ltd., of South Korea covering ongoing engineering, procurement, and construction activities for MLNG's planned 8-million tonne/year liquefaction plant in Lake Charles, La.

Under the agreement, SKEC will:

• Continue to review all pre-frontend engineering and design information and data included in the preliminary resource reports submitted to the US Federal Energy Regulatory Commission.

• Assist MLNG in completing final resource reports as part of MLNG’s filing application to FERC, targeted for submission the end of the month.

• Complete the FEED for the Magnolia LNG project including gas pretreatment facilities, four 2-million tpy LNG trains, two 160,000-cu m full containment storage tanks, jetty, and ship loader facilities, and all related infrastructure and services.

• Prepare a detailed lump-sum turnkey EPC cost estimate on an open book basis Nov. 28.

• Negotiate and agree with MLNG a detailed lump-sum turnkey EPC contract term sheet; targeted for June 30.

• Negotiate and agree a definitive and binding lump-sum turnkey EPC contract based on the term sheet.

SKEC has been working on several these activities under a shorter term letter of engagement, which the technical services agreement supersedes. SKEC has also already completed a satisfactory detailed review of LNG Ltd.’s optimized single mixed refrigerant process technology, to be used for MLNG, and provided the company with an initial estimated EPC cost of $1.57 billion, consistent with the LNG Ltd.’s budget estimate.

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