26/07/2013 - 12:09

LNG Ltd soars after private equity deal

26/07/2013 - 12:09


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Shares in Perth company Liquefied Natural Gas Ltd have soared after it signed a conditional US$660 million funding agreement with a private equity group for a proposed project in the United States.

US investment firm Stonepeak, established in 2011 by former Macquarie Bank executives Michael Dorrell and Trent Vichie, has agreed to provide the full $US660 million of equity finance needed to develop LNG Ltd's Magnolia gas project in Louisiana.

In exchange, Stonepeak will acquire a stake of about 50 per cent in the gas plant.

The investment is conditional on LNG Ltd locking-in about US$1.54 billion of long-term project debt funding.

The project involves construction of an 8 million tonne per annum LNG plant in Louisiana, at an estimated cost of $US2.2 billion ($A2.4 billion).

It is dependent, among other things, on the US government approving the export of gas.

If the project achieves financial close, Stonepeak will pay a US$66 million success fee to LNG Ltd.

LNG managing director Maurice Brand said in a statement the building blocks for its Magnolia project were coming together quite quickly.

It has also signed an agreement to supply gas to Panama and other countries covered by a US free trade agreement.

The company's shares were up 7 cents to 28 cents at close of trade. Just one month ago, they were at an all-time low of 12 cents.


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