Register with us today

and in less than 60 seconds continue your access to:Latest news headlinesAnalytical topics and featuresCommodities videos, podcast & blogsSample market prices & dataSpecial reportsSubscriber notes & daily commodity email alerts

Already have an account?

Log in to register

Forgot Password

Please Note: Platts Market Center subscribers can only reset passwords via the Platts Market Center

Enter your Email ID below and we will send you a link to reset your password.

  • Email Address* Please enter email address.

If you are a premium subscriber, we are unable to send you a link to reset password for security reasons. Please contact the Client Services team.

If you are a Platts Market Center subscriber, to reset your password go to the Platts Market Center to reset your password.

In this list
LNG | Natural Gas

Australia' s LNG Limited appoints voluntary administrators in sign of potential insolvency

LNG | Natural Gas | Natural Gas (European) | Natural Gas (North American)

Global gas, LNG markets twisted around bullish, bearish elements, awaiting arrival of winter demand

LNG | Natural Gas | NGL

Platts LNG Alert

Capital Markets | Commodities | Energy | Electric Power | Electric Power Risk | Natural Gas | Banking | Infrastructure | Structured Finance

Global Power Markets Conference, 35th Annual

Natural Gas | Natural Gas (North American) | Oil | Crude Oil | Refined Products

Western US Gulf of Mexico evacuations beginning ahead of tropical storm

Australia' s LNG Limited appoints voluntary administrators in sign of potential insolvency


Future of Magnolia LNG project in Louisiana uncertain

Commercial, financial struggles have beset developer

Houston — Australia's LNG Limited has appointed voluntary administrators from PricewaterhouseCoopers, in a sign that the Magnolia LNG developer may be preparing to enter bankruptcy or liquidation. CEO Greg Vesey has also stepped down from the board.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

The developments, announced Friday, followed the April 13 withdrawal of a takeover offer for LNG Limited that the company had said was the best chance to save the up to 8.8 million mt/year export project that it has been pursuing in Louisiana.

The future of the project and the company's US operations was not clear. PwC officials were reviewing the parent company's assets and planned to contact creditors afterward, according to a statement on LNG Limited's website.

In Australia, voluntary administrators are usually appointed by a company's directors after they decide that the company is insolvent or likely to become insolvent.

Administration is akin to bankruptcy in Australia. In some cases, administrators may be appointed for the purpose of liquidation. LNG Limited had most recently said it only had enough cash to fulfill its obligations until May.

PwC officials were installed to speak for the company. Reached via WhatsApp, a spokeswoman, Lisa Macnamara, said she could not immediately address questions about Magnolia LNG or the status of certain LNG Limited executives, including Vesey.

The precipitous decline of the company's operations comes amid weak global LNG market conditions that have been exacerbated by the coronavirus pandemic. Widespread stay-at-home orders have caused overall demand to drop and led to a further decline in international prices, a trend that started before the virus was first observed in China in December.

LNG Limited's financial challenges started well before that, and only got worse afterward.

Magnolia LNG received its certificate authorization from US regulators to build Magnolia in 2016. It also secured a fully wrapped engineering, procurement and construction contract. What it was unable to do in the four years since was reach any firm offtake deals with buyers of the LNG it planned to produce. Most North American developers need such contracts to be able to secure financing for the billions of dollars for construction.

The commercial struggles continued even after the company's bargain offering for Magnolia capacity, which Vesey disclosed to S&P Global Platts in April 2019 on the sidelines of an industry conference in China. Vesey said the company was willing to take as little as $2.35/MMBtu and 113% of Henry Hubto secure offtake agreements.

Last fall, the company announced a preliminary deal for 2 million mt/year of supply that was to be tied to a proposed Vietnamese power project, but that transaction still had yet to be finalized at the time the administrators were appointed Thursday.

When the takeover offer for LNG Limited from an energy investor with ties to floating regasification facilities in Asia and Europe was announced February 28, LNG Limited said the deal was critical to being able to save Magnolia LNG. The alternative was the risk of administration or liquidation, it said at the time.

Insolvency would trigger contract clauses that could allow counterparties to terminate the project's EPC contract and its port lease for its 115-acre site along the Calcasieu Ship Channel.