“Our existing funding is sufficient to meet all of LNGL’s commitments until late April 2020, but we need to secure additional funding urgently to continue operating beyond then,” the developer had to admit. Temporary financing is – much needed to avert a financial crunch – not now forthcoming either from a U.S. equity and capital fund.
The delay of the takeover bid has been caused by the “unavailability of relevant personnel” due to Covid-19 contingency measures. The bidder’s statement from the Singaporean entity, known only as LNG9 Pte Ltd, has not yet sent to LNG Ltd shareholders, though the Australian developer indicated it would accept the offer once received.
Bridge financing now needs to be forthcoming quickly allow the Magnolia liquefaction plant proceed operations. However, an U.S. fund declined to provide any debt financing, leaving LNG Ltd high and dry.
Vietnam awaits first US LNG cargo in early June
The first LNG cargo from the Magnolia LNG project in Louisiana, U.S., had initially been scheduled to arrive in May, or early June, but this timeline is now looking increasingly unrealistic. Despite its financial squeeze, LNG Ltd. needs to honour its gas supply agreement with the Bac Lieu import terminal from 2023.
The contract stipulates the shipment of 2 million tons per annum from Magnolia LNG to Vietnam, on a free-on-board (FOB) basis, for used in $4 billion power project on the Mekong Delta. Singapore-based Delta Offshore Energy in late January was handed an investment permit to develop a 3,200 MW combined-cycle power plant with adjacent regas terminal.
CCGT scheduled to start-up in 2023
Delta is the lead-developer for the 3.2 GW power station at Bac Lieu, designed to consist of four 750 MW gas turbine units and a fifth unit with 200 MW. The integrated LNG import and power gen project is scheduled to start operations in 2023.
Detailed engineering work and a full feasibility study have been completed, with the LNG import solution being developed in cooperation with Norway’s 7 Seas.
Vietnam seeks to shifts its power sector towards gas generation and has made plans to import 5 mtpa of LNG by 2020, which will be gradually increased to 10 million tons per annum (mtpa) by 2030 and 15 mpta by 2035.
To accommodate these LNG import volumes, the Vietnamese government is supporting plans to develop a second LNG import terminal near a projected power plant in Ninh Thuan province. That project is backed by Novatek which will seek to supply it with fuel from its Yamal LNG export plant in northern Siberia, or the Arctic LNG II project in the long run.