13/03/2014 - 17:00

LNG raises $4.2m for Magnolia

13/03/2014 - 17:00

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Liquefied Natural Gas has completed a $4.2 million equity raising which will allow it to fulfill the requirements of a recently signed gas transportation contract.

LNG raises $4.2m for Magnolia
An artist's impression of the completed Magnolia project.

Liquefied Natural Gas has completed a $4.2 million equity raising which will allow it to fulfil the requirements of a recently signed gas transportation contract.

LNG issued 10 million shares at 42 cents per share to institutional and sophisticated investors.

Foster Stockbroking acted as sole lead manager to the placement.

The capital raising will allow LNG to meet a key condition of a gas pipeline capacity agreement with Kinder Morgan Louisiana Pipeline, which represents one of the key milestones in the development of the company's Magnolia project.

KMLP required LNG to issue a $US2 million letter of credit, which guarantees the minimum development costs that KMLP is expected to incur under the pipeline agreement.

LNG said the funds raised from the placement would support the letter of credit and provide further working capital towards the Magnolia project.

"This capital raising will allow the company to accelerate the precedent agreement with Kinder Morgan," LNG managing director Maurice Brand said.

"We are delighted with the increasing level of suppport from Australian institutions."

LNG last year secured export approval from the US government for the Magnolia project and inked an agreement with Stonepeak Partners for the full equity requirement of the $US660 million construction and commissioning costs of Magnolia's initial two LNG trains.

LNG shares were steady at 46.5 cents at 12:13pm WST.

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