Lng Tolling Agreements

The annual LNG delivery program should be developed on the basis of information provided by all parties to the toll and implemented in a non-discriminatory manner. Through the annual delivery program, toll parties deliver their LNG and co-produced products to third parties, monetizing their gas rights. All project participants collect annual information on planned facility maintenance and dismantling, gas supply forecasts and other relevant projected events that will affect or impact the progress of the delivery program. The annual delivery program is generally refined each month when the 90-day schedule is developed. This schedule reflects changes to the annual delivery program and defines the lifting plan. The development of the annual delivery program is generally fluid and involves cooperation between project participants. 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. It is not an exclusive list of important considerations; it merely illustrates the complexity and importance of previous decision-making issues in the process of structuring and properly documenting the toll system. 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). „We see that the toll model is not the current model,“ Bird told CIHI.

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 tanks and by-products, bridges, lifting arms and associated equipment) are consistent. 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. 2) Operating defects: operations and controls are not sufficiently developed and/or implemented. The creation of a local office capable of dealing with the operational complexity of a toll booth is essential to avoid heavy financial penalties and reputational consequences if operational challenges and adverse events are not adequately addressed (this will happen!). HOUSTON INTERVIEW (ICIS): U.S. supplier Sempra, which is currently building The Cameron LNG export plant in Louisiana, is moving away from the initial toll model from its first installment of contract to a free onboard model (FOB) or an ex-ship-delivered (DES) model, said the new president of its LNG division, Justin Bird.