28/07/2014 - 14:51

LNG Ltd buys Canadian project for $US11m

28/07/2014 - 14:51

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Perth-based Liquefied Natural Gas has agreed to buy out Anadarko Petroleum Corporation’s Bear Head LNG project for $US11 million.

LNG managing director Maurice Brand.

Perth-based Liquefied Natural Gas Limited has agreed to buy out Anadarko Petroleum Corporation’s Bear Head LNG project in Canada for $US11 million.

The sale covers 180 acres (72.8 hectares) of industrial-zoned land and 75 acres (30.35ha) of deep water, as well as foundations in place for two 180,000 cubic metre LNG tanks, all located in Nova Scotia, Canada.

LNG said the land has been cleared, a majority of site works have been completed and roads constructed.

“The sale also includes the project rights of the previously proposed LNG import terminal, including all assets, rights and obligations associated with the Bear Head project,” LNG said in a statement. 

LNG has been seeking mine sites in North America where it can replicate its flagship Magnolia LNG project, located in Louisiana, and fast-track development by using its existing development team and its OSMR technology. 

“We are particularly keen to secure opportunities where we can either replicate Magnolia LNG or substantially use all the company’s technical, engineering, technology and development expertise,” LNG managing director Maurice Brand said.

“Bear Head fits those criteria with the development plan based on the use of the company’s OSMR LNG process technology which will deliver lower capital costs, improved energy efficiency and a shorter development and construction schedule.”

The company said it was in discussions with gas transportation companies and owners of gas reserves regarding the supply of natural gas from onshore and offshore Canadian supply options, and the Marcellus shale gas play in North-Eastern USA, to the Bear Head site.

“Bear Head has considerable unlocked value and sunk costs that can readily be transformed into an LNG export facility,” Mr Brand said. 

“We have been undertaking due diligence on Bear Head since October 2013 so we are confident that we can hit the ground running and obtain all permits and approvals by mid-2015, and during 2016, make a final investment decision.

LNG said in a statement that once the transaction was completed, it would appoint John Godbold as chief operating officer and project director of Bear Head LNG Corporation. 

Ian Salmon will be appointed chief financial officer and chief commercial officer following the close of the transaction.

“With the appointment of John and Ian and several other key managers to follow, we are well resourced to progress our second North American LNG export project in a timely manner,” Mr Brand said. 

“Bear Head LNG will share an office in Houston with Magnolia LNG.”

LNG’s share price last traded at $3.25 per share. 

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