The Magnolia LNG project got a boost in funds Friday, as officials from its parent company announced a financial agreement with a Manhattan investment firm.

Liquefied Natural Gas Ltd., the Perth, Australia-based company that owns Magnolia LNG, has entered into an agreement with Stonepeak Infrastructure Partners to receive financing that will help with the project’s construction and commissioning.

It is estimated that Stonepeak will provide all of Magnolia’s $660 million equity financing and receive a 50 percent interest in the project. LNG Ltd. will maintain half of Magnolia’s ownership. The project’s cost is estimated at $2.2 billion.

“Having an equity investor means we can now proceed with confidence with the development, knowing that there’s equity funding available at the end of the day,” said Ernie Megginson, Magnolia’s vice president of project management. “That will encourage additional customers to sign up with us because they will see that we can execute this project and that we have the money to back us.”

The project’s ownership split will be finalized at the agreement’s signing and will be based on Magnolia’s actual development costs. LNG Ltd. plans to finance the project based on 70 percent project debt financing. Stonepeak’s $660 million investment amounts to 30 percent equity financing.

Megginson said the Magnolia project entered the permitting process with the Federal Regulatory Commission in March. If approved, the project’s estimated two-year construction period is expected to begin in mid-2015.

The LNG Ltd.-Stonepeak agreement is expected to be finalized and signed by the end of the year, Megginson said.

“We were never going to be the 100 percent owner of the project,” he said. “Stonepeak came down to our May 2 open house at the Pujo Street Café. They were very impressed with the reception they got from the local community and the support they saw for this project. Stonepeak’s involvement would not have happened without the local support.”

(American Press Archives)