Liquefied Natural Gas Limited (ASX: LNG) has seen its share rise 7% in early trade today to $2.29, after the company announced that it had extended its Fisherman’s Landing site option agreement and Kinder Morgan Louisiana Pipeline, LLC (KMLP) had filed an application to transport gas to LNG’s proposed Magnolia project.
LNG is looking to secure gas for its Fisherman’s Landing project in Gladstone, Queensland and re-establish banking agreements for the project, before it can recommence construction work. The company has received an extension through to September 2014, from the Gladstone Ports Corporation.
Over in the US, where LNG’s primary focus is on getting its Magnolia LNG processing and export facility into operation, KMLP is seeking approval to install facilities that will allow gas to be transported from several major interconnected gas pipelines to Magnolia.
The news comes as one broker now estimates that up to 40% of the company could be in foreign hands. Foster Stockbroking has released a report noting that well-known US investors including Seth Klarman’s Baupost Group, Valinor Management, Claren Road and Fairview Capital have all taken substantial stakes in the company.
LNG hopes to have everything in place by mid-2015 to begin construction in the second half of 2015, with first LNG expected in 2018. Total cost is estimated at US$2.2 billion, but could come in under that, with engineering, procurement and construction (EPC) costs estimated at US$1.57 billion.
Should LNG manage to get its project built on time and budget, costs are estimated at around half that of existing LNG projects, including Woodside Petroleum Ltd’s (ASX: WPL) Pluto, Origin Energy Limited’s (ASX: ORG) Australia Pacific LNG and Santos Limited’s (ASX: STO) Gladstone LNG projects.
LNG is up 1,732% in the past year, thrashing the 13% return from the S&P/All Ordinaries Index (Index: ^AORD) (ASX: XAO), but more could be in store if the positive news keeps rolling in.
Motley Fool writer/analyst Mike King owns shares in Santos. You can follow Mike on Twitter @TMFKinga
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