Natural gas facility proposed in Lake Charles

Magnolia LNG said on Thursday it might develop a $2.2 billion natural gas liquefaction production and export facility at The Port of Lake Charles in southwest Louisiana.

The proposed project is the second major industrial announcement this week for the Port of Lake Charles, where G2X Energy Inc., of Houston, said it plans to build a $1.3 billion plant to turn natural gas into gasoline.

In a joint announcement with the state, Magnolia said it expects to make a final decision on its project in late 2014, after it secures permits and completes financing.

The midscale LNG facility would be on 90 acres at the port’s Industrial Canal, off the Calcasieu Ship Channel.

Magnolia LNG would produce 4 million metric tons of liquefied natural gas per year. Construction could begin in 2015.

The facility would create 45 jobs with an average salary of $75,000 per year, plus benefits.

The state’s economic development department estimates the project would create 175 indirect jobs and 1,000 construction jobs.

Louisiana Economic Development said it began working with Magnolia LNG in late 2012. The proposed 90-acre site would include a long-term lease with The Port of Lake Charles. If Magnolia decides to proceed with construction, the company is expected to make use of LED incentive programs, such as the Quality Jobs Program and Industrial Tax Exemption Program.

Magnolia is a newly formed, wholly owned subsidiary of Liquefied Natural Gas Ltd., which is headquartered in Perth, Australia. Magnolia said its project would be positioned for direct access to several existing natural gas pipelines.

The facility would add conventional combined heat and power technology with industrial ammonia refrigeration to improve the performance of the liquefaction process, the company said. Magnolia would distribute to domestic markets as well as countries that have free-trade agreements with the U.S.

The company said it could also explore a potential expansion to 8 million metric tons per year in the future.

“Southwest Louisiana’s attractive infrastructure and strong workforce made Lake Charles an ideal location for our planned facility,” said Maurice Brand, Magnolia LNG managing director and joint chief executive director. “Whilst the company remains focused on securing the appropriate contracts, agreements and permits, we expect to commence construction of our first U.S. venture by 2015.”

Magnolia LNG will seek federal Department of Energy free-trade agreement approval in 2013. The company will submit a pre-filing application to the Federal Energy Regulatory Commission in March, before it completes the selection of project partners by June 2013. The company said it would begin hiring in early 2015, with commercial operations starting in 2018.