LNG Limited (ASX: LNG) has received regulatory approval to boost exports from its US processing facility.

For countries that the US has a free-trade agreement with, LNG’s export quota will rise to 8.8 million tonnes per annum — a 10 per cent increase on the current level of 8 million tonnes.


  • Scroll down for the ASX’s other energy movements today.


It’s the first approval from the US Department of Energy (DoE) in five years, after a previous ruling in March 2014 allowed LNG Ltd to increase exports to 8mtpa from 4mtpa. (LNG can still export to countries with a free-trade agreement, after getting separate approval in 2016.)

Stockhead has asked LNG to comment on which countries in particular it hopes to target in the wake of the latest export increase.

LNG’s main project in the US is the construction of a gas processing facility in Louisiana, via its fully owned US subsidiary Magnolia LNG, LLC.

Magnolia’s current proposition is to build four liquefaction production trains, each with a capacity of at least 2.2mtpa.

“Final investment decision and initiation of construction is expected upon execution of sufficient offtake agreements to support financing,” the company said.

LNG CEO Greg Vesey said the DoE approval gives the company greater flexibility and increased potential to sign sales agreements.

“Our discussions with off-takers are at an advanced stage, and we know they will see this action by the DoE as a positive development for Magnolia,” Vesey said.

Last November, the company received a second-strike on executive remuneration as shareholders raised concerns about Vesey’s $US635,000 salary.

Shares in LNG were up four per cent in morning trade at 48.5 cents, down from a 12-month high of 88 cents reached in August last year.

On energy markets, prices for brent crude oil ended the week flat at $US67 a barrel, and have dipped by 0.75 per cent in Monday trade.

Analysts at RBC Capital Markets also highlighted that OPEC chose to forego its April meeting last week, thereby confirming that the current production cuts in place — of 1.2m barrels per day — will be extended to June.

“Spot LNG prices continued to trend lower, with Asian benchmarks for May delivery reaching as low as US$4.65/mmBtu (one million British Thermal Units) this week,” RBC said.


In other ASX energy news today

    • American Patriot Oil & Gas (ASX: AOW) flagged some pending legal problems as its newly constituted board runs the ruler over the company’s accounts. It announced late on Friday that directors are currently in discussions with the underwriter of its recent share issue, “in relation to a potentially litigious dispute”. LNG faced a shortfall in its attempts to raise $3 million last October. The $3m target was reached after shortfall shares & options were issued to clients of the lead underwriter, Capital Investment Partners Pty Ltd. AOW shares have been suspended from trading since March 14.


    • Shares in Petsec Energy (ASX: PSA) were down 15 per cent in morning trade at 8.5 cents a share, after the company announced results from its drilling operation at the Hummer oil & gas field in Gulf of Mexico, USA. The project was a duster, as the primary oil & gas zones targeted by PSA were deemed “uneconomic for production”. The company said it abandonment costs will amount to $6.25m, to be expensed in the current period.


  • And there were a couple of small capital raisings announced at the end of last week. Key Petroleum (ASX: KEY) said it had completed arrangements to raise $710,518, via the issuance of about 142m shares at half a cent. The money will go towards prep works at Key’s Tanbar Gas Project in the Cooper Basin and the development of its oilfield project at Mt Horner. Elsewhere, Eneabba Gas (ASX: ENB) wants to tap the market for $785,000 at 0.3 cents per share, to fund working capital requirements and due diligence on potential acquisitions. The offer will be fully underwritten by CPS Capital Group Pty Ltd.