Liquefied Natural Gas studies another North American project

By JAMES PATON

Bloomberg

Liquefied Natural Gas Ltd., the Australian company planning to build plants to liquefy gas in the U.S. and Canada, is considering a third project in North America to take advantage of increasing demand.

Starting next month, the Perth-based company will look at options to “unlock further value,” including trading on a second stock exchange, Managing Director Maurice Brand said by phone Sept. 24. Liquefied Natural, which has climbed almost 15-fold in Sydney trading this year, is preparing to open an office and hire two or three executives in Houston, he said.

Liquefied Natural has attracted investors including Boston-based Baupost Group LLC as it moves ahead with plans to develop the Magnolia LNG project in Louisiana. The company agreed in July to acquire the Bear Head LNG venture in Canada from Anadarko Petroleum Corp. for $11 million and is evaluating four or five other potential investments, Brand said.

“We’ve got an active short list,” he said. “We’ve got to deliver the big-ticket items for Magnolia first. But while we’re doing that, we need to be looking for new opportunities.”

Liquefied Natural declined 0.7% to close at A$4.30 a share in Sydney, while the benchmark index fell 0.7%. Its market value has swelled to almost A$2 billion ($1.8 billion) from about A$100 million at the start of the year.

Queensland Extension

Liquefied Natural joins companies including Cheniere Energy Inc. and Sempra Energy seeking to tap the U.S. shale boom and build LNG export projects. The U.S. will compete with Australia, where companies from Chevron Corp. to Origin Energy Ltd. are developing export ventures targeting Asia.

“In the U.S., there’s quite a lengthy regulatory process to get consent to build plants and export gas,” Origin Managing Director Grant King said Sept. 16 at the Bloomberg Summit in Sydney. “They are being quite measured in the rate at which plants are getting through that process.”

While Liquefied Natural is keen to develop an Australian export project in Queensland state, it’s trying to obtain gas supplies to underpin the Fisherman’s Landing development.

The company is seeking to extend a lease agreement at the Queensland project site to the end of the year from Sept. 30, “while we work through a couple of interesting opportunities” for Fisherman’s Landing, he said, declining to comment further.

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