Magnolia project gets backing from investment firm

By By Frank DiCesare / American Press

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.”