LNEnergy inks HoA with Gunvor for supply of LNG in Italy
LNEnergy has signed a heads of agreement (HoA) with commodity trader Gunvor for the sale of LNG from its planned small-scale production facility at the Colle Santo gas field in Italy, Reabold Resources, which owns a stake in LNEnergy, announced on May 2. LNEnergy has the exclusive right to acquire a 90% interest in Colle Santo.
Under the terms of the HoA, Gunvor will purchase approximately 44,000 tonnes/year of LNG from LNEnergy's facility, with the point of sale being the truck loading flange at the small-scale LNG plant. The LNG will then be delivered by truck within Italy. The pricing mechanism for the LNG will be aligned with the Italian PSV price.
The contract term is set to be for an indefinite period with a minimum term of five years. Additionally, the HoA includes provisions for a potential prepayment by Gunvor for a portion of the first five years of deliveries, amounting to approximately 66,000 tonnes of LNG. This prepayment is contingent upon the finalisation of definitive transaction documentation and the receipt of necessary permits for the construction and operation of the LNG production facility.
"Colle Santo has the potential to provide significant, reliable and low carbon energy into the Italian market, improving European energy security whilst contributing to an efficient energy transition," Stephen Williams, Co-CEO of Reabold commented.
The Colle Santo gas field, as described on Reabold's website, is development ready, pending the acquisition of necessary permits. With two wells already drilled and no additional drilling required. The field has 65bn ft3 of gross 2P reserves.