Liquefied Natural Gas scraps short-lived plan to move to the US
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Liquefied Natural Gas Limited has scrapped a short-lived plan to move to the US.
The board today halted a move — proposed in June — to redomicile the business and seek a listing on the Nasdaq or New York Stock Exchange.
“The Board’s decision allows management to maintain its focus on marketing the offtake [future sales] at Magnolia LNG and Bear Head LNG, to concentrate on opportunities to create additional long-term value for LNGL shareholders and to strengthen liquidity,” Vesey said.
LNGL’s (ASX:LNG) communications spokesman Micah Hirschfield said nothing had changed at the company in the five months since the initial decision, but they’d realised it wasn’t the right move for the business, right now, as they had to focus on securing offtake agreements.
“The initial point was to have a listing or domiciling where our projects are located,” he told Stockhead.
The second reason is because as an LNG export development company they don’t have any direct peers on the ASX and are grouped with oil and gas companies.
Magnolia is a US subsidiary that’s developing an LNG export terminal on Lake Charles in Louisiana. It is fully permitted but requires offtake agreements in order to start building.
Bear Head is a Canadian subsidiary developing an LNG export plant in Nova Scotia. Mr Hirschfield says it’s a couple of years behind Magnolia.
It comes as the first wave of US LNG export facilities are kicking into production.
Cheniere Energy’s Sabine Pass plant was the first, starting last year, and the latest is Dominion Energy’s Cove Point LNG facility which is scheduled to start production by the end of 2017.
The first wave is expected to be able to export about 12 per cent of total US production, or 9 billion cubic feet of gas a day.
A second wave of 20 more proposed plants could follow.
These plants are coming online in a global market that’s well supplied with gas, thanks to the efforts of export heavyweights like Australia and Qatar.
