Magnolia LNG (MLNG) has executed a memorandum of understanding (MOU) with KBR and SKE&C USA (SKEC). KBR and SKEC propose to execute a joint venture agreement (JVA) on a 70/30 percent participation basis.
The MOU follows the execution of a technical services agreement with SKEC in March 2014 and a subsequent technical services agreement with KBR that was announced on 5 January 2015. Under the technical services agreement the parties will complete all due diligence in relation to technical commercial and contractual matters that will enable the EPC JV to execute a lump sum, turnkey engineering, procurement, construction, commissioning, start‐up and performance testing EPC contract for the LNG plant.
Magnolia LNG has set the following milestone schedule;
JV Agreement between KBR and SKEC: February 2015
Initialling EPC Contract between Magnolia LNG and the JV: 31 March 2015
EPC Contract signing between Magnolia LNG and JV: April 2015
SKEC has initialled the EPC contract, which incorporates all requirements stipulated by BNP Paribas, Merlin Advisors, legal advisors White and Case and Stonepeak Partners. Magnolia LNG does not expect any material changes to the EPC contract.
LNGL Managing Director and CEO, Maurice Brand, said that, “the execution of the MOU with KBR and SKEC was a further positive step towards the formation of the EPC JV that will provide the “EPC Wrap” that is required by both project lenders and equity participants."
MLNG’s Chief Operating Officer, John Baguley added, “Our MLNG team look forward to working with KBR in their joint venture with SKEC as Magnolia LNG advances towards a final EPC Contract and our planned financial close towards the middle of 2015. During the period through to financial close we will be working to incorporate any comments received from FERC during their preparation of the Draft Environmental Impact Statement, and to undertake the necessary rigorous planning and scheduling required to support achieving first LNG in the fourth quarter of 2018.”
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