Magnolia LNG has signed a non-binding Tolling Agreement Term Sheet with AES Latin American Development (AES).
The agreement is for LNG production capacity rights of between 800 00 tpa and 1 million tpa from the proposed Magnolia LNG project in Lake Charles, Louisiana.
Legally binding agreement
The agreement details the key terms to be included in a legally binding tolling agreement. The two companies will work together to finalise the tolling agreement by the end of September 2014.
This latest agreement with AES is structured and contains similar terms to the tolling agreement term sheets already signed with Brightshore Overseas Limited, Gas Natural SDG and LNG Holdings Corp.
MLNG managing director, Maurice Brand, commented: “This is another significant step for the MLNG Project and demonstrates a high level of confidence that the project will achieve its goal to commence construction next year. The proposed key commercial terms in the AES Agreement support the economics of proceeding with a fourth LNG train, with the company confident that it will be able to enter into a Tolling Agreement for the remaining capacity of the fourth LNG train to bring the MLNG Project to its total targeting nameplate capacity of 8 million tpa.
“Significant progress has been made on the negotiation of the existing three legally binding Tolling Agreements and there is also likely to be a Inter-Shipping Coordination Agreement, which will govern the long term relationship between the potential five LNG Tolling Parties. These are complex agreements, which span a period of over 20 years and cover fixed payment obligations to MLNG of around US$ 4 billion per LNG train.
“AES will now participate in the negotiation and coordination of these agreements with the company targeting to sign legally binding Tolling Agreement for the MLNG Project’s initial 2 LNG trains (totalling 4 million tpa nameplate capacity) in the first half of 2014.”
Adapted from press release by Katie Woodward
Read the article online at: https://www.lngindustry.com/liquid-natural-gas/06032014/magnolia_lng_tolling_agreement_252/