What Is An Lng Tolling Agreement

Contractual clause in a sales contract (SPA) that requires payment of a minimum amount of natural gas, whether or not the delivery is accepted by the buyer. As a general rule, the levy has an element to be paid, regardless of whether the processing service is used or made available, either for previously agreed quantities of gas to be delivered for processing, or for a capacity right in the LNG facility. As a general rule, the paying unit needs a basic cash flow to cover expenses related to the use or availability of the processing service. Processing costs often support project financing for export facilities. Lenders advance certain aspects of the royalty structure to ensure that credit risk is properly placed and that the flow of payment is constant throughout the term of the financing. Unlike other provisions of a toll agreement, the royalty structure may not be consistent between projects. To achieve project success, fiscal sustainability is essential and the ability to generate sufficient cash flow to support project debt and other lenders` needs is essential. As part of the development of the annual delivery program and the 90-day schedule, project participants must also agree on conditions for or implementing changes to the annual delivery program and procedures for assigning surplus records on a ratible and fair basis. The cooperation and agreement of all project participants is essential for this planning process. LNG projects are structured in a variety of ways. There is no standard structure; However, the toll model has been used in several recent LNG export projects. With regard to the toll model, the considerations highlighted in this document mainly concern a project toll model, unlike a third-party toll (discussed at the end of the document at a very high level). It is essential that the provisions relating to repeal and planning conditions (including port use agreements or conditions of use), the measurement method and the allocation of LNG and other by-products to all toll operators who share common facilities (common facilities include LNG reservoirs and by-products) are consistent.

, walkways, lifting arms and associated equipment). Clear, non-discriminatory allocation procedures and measurement principles to accurately determine the right of each toll booth to the removal of LNG and by-products are important not only for project participants, but also for financiers. The allocation procedures and evaluation method should apply equally to all parties to the toll and be reviewed by all parties using common or common facilities, or be appointed by experts. The lifting, measurement and allocation conditions are often incorporated into the toll agreement; However, it is not typical that these conditions are incorporated into a separate agreement signed by all the parties to the toll, which facilitates the flow of information, among other things, for the development of the supply plan for supply of gas, the annual LNG lifting program, the allocation of LNG and by-products, the standards and inspections of ships, and the determination of liability. Squadron Energy Group`s Australian Industrial Energy Group has signed a long-term lease agreement with NSW Ports for a port site in Port Kembla, 112 km south of Sydney, for the development of the company`s LNG import terminal project. This paper highlights (i) a number of findings that need to be addressed during the structuring phase of the development of the project and (ii) the need for consistency of documents in toll agreements with different parties.