Gunvor will purchase around 44,000 tonnes of LNG each year, from LNEnergy’s planned small-scale LNG production facility at the gas field, and will be priced based on the Italian PSV price
Reabold to sell LNG to Gunvor, LNEnergy. (Credit: Jason Mitrione on Unsplash)
UK-based investment company Reabold Resources has signed a non-binding agreement with Gunvor International and LNEnergy to sell LNG from the Colle Santo gas field in Italy.
LNEnergy, in which Reabold owns a 26.1% equity interest, holds an exclusive right to acquire a 90% interest in the Colle Santo gas field.
Under the terms of the agreement, Gunvor will purchase around 44,000 tonnes per annum of LNG from LNEnergy, at its planned small-scale LNG production facility at the gas field.
The LNG will be priced based on the Italian PSV price, and the point of sale will be the truck loading flange at the small-scale LNG plant, from where the LNG will be delivered by truck.
The contract is valid for an indefinite period with a minimum term of five years.
Reabold co-CEO Stephen Williams said: “We are delighted with this progress towards an extremely significant milestone for our LNG project at Colle Santo in Italy.
“The agreement envisages a counterparty of the highest quality potentially providing both offtake and a prepay, which is extremely valuable for the project in these times of capital scarcity in the industry.
“In keeping with Reabold’s broader strategy, 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.”
Gunvor would make a potential prepayment for a portion of the first five years of deliveries, such prepayment amounts being a total of around 66,000t of LNG or 999,000MWh.
The prepayment is subject to LNEnergy obtaining the required permits to construct and operate the LNG production facility, and agreement on a definitive transaction documentation.
The average forward Italian PSV gas price for the years 2025-2030 is currently approximately €30/MWh.
Furthermore, LNEnergy and Gunvor will start negotiations for a fully termed LNG sale and purchase from Colle Santo over the next six months.