In morning trade the Liquefied Natural Gas Ltd (ASX: LNG) share price has charged higher following an update on its Vietnamese operations.
At the time of writing the LNG producer’s shares are up 5% to 20 cents.
What did Liquefied Natural Gas announce?
This morning Liquefied Natural Gas responded to a press release by Delta Offshore Energy which revealed that Vietnam’s prime minister has approved the inclusion of the Bac Lieu LNG-to-Power Project into the National Power Development Plan 7 (PDP7).
Liquefied Natural Gas advised that it was very pleased with the news and notes that this approval clears the way for Delta Offshore Energy to negotiate and finalise a 25-year power purchase agreement (PPA) with Electricity Vietnam to underpin its LNG-to-power project in Vietnam’s Bac Lieu Province.
It also means that Liquefied Natural Gas and Delta Offshore Energy can now finalise a binding sale and purchase agreement for delivery of 2 million tonnes per annum of U.S. LNG from its Magnolia LNG operation. This is pursuant to the two parties’ non-binding memorandum of understanding.
The company’s managing director and CEO, Greg Vesey, said: “As we have previously disclosed, the approval of the amendments to Vietnam’s Power Development Plan 7 was the prerequisite for execution of our binding sales and purchase agreement with our partners, Delta Offshore Energy, for 2 mtpa from Magnolia.”
“We thank Prime Minister Phúc and members of his Cabinet for their supportive efforts, and will immediately begin completing the terms of what will be the first long-term sale and purchase agreement for LNG to Vietnam,” he added.
Shareholders will no doubt be pleased with today’s gain as it has been a difficult 12 months for the LNG producer. Prior to today, its shares were down 63% since the start of the year. As a comparison, the S&P/ASX 200 Energy index is up a sizeable 23% over the same period.