The royalty structure in a third-party toll contract is generally intended to provide a return at supply levels, as the toll company takes a limited risk. The pricing interaction is fuelled by (i) investments in facility construction, operating costs and a fair profit margin for investors who take the risk of the project; and (ii) ongoing market price discussions with LNG buyers who, in some cases, hope to link oil-based index prices to gas-based indices. Market pricing should not be addressed in this document, except that pricing discussions and decisions will certainly play a role in the viability of many of the proposed projects in North America. As a general rule, the levy includes an element to be paid, whether the processing service is made available or not, either for quantities of gas previously agreed to be delivered for processing, or for a capacity right in the LNG facility. As a general rule, the paying company 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. In addition, the toll system is most often a ”Send-or-Pay” agreement, i.e. the paying customer pays for toll services, whether or not the paying customer actually uses these reassignment services. Ms.
Marietta has a particular expertise in the fields of LNG and extensive experience in the fields of engineering, procurement and supply. Read more In the development of the annual delivery program and the 90-day schedule, project participants must also agree on conditions that authorize changes to the annual delivery program and excessive reporting procedures, in accordance with the various toll agreements applicable to the project, or implement a framework. The cooperation and agreement of all project participants is essential for this planning process. Mr. Salo has, as a… Read more Optimal: A toll system will establish a uniform liability system with clearly defined remedies, applied consistently and non-discriminatoryly. The liability and recourse regime applies to paying customers, facility operators, facility owners, lift coordinators, vessels using LNG facilities and other project participants. Customers subject to tolls under separate agreements require that all users be treated consistently in the event of gas supply failure, non-accumulation of LNG or by-products, off-spec gas or LNG, partial or total closure of facilities, force majeure and similar events that may affect all affected customers. Throughout the project, a concise liability regime generally applies, providing a high level of security for project participants and financiers in the event of an incident. When are quantenmeruit and quantentalbat relevant? The quantum (value of services) and quantum value (value of goods) rights arise in different situations ranging from the issue of contractual terms to the date on which no contract exists (Serck v Drake – Scull).
General toll systems are complex and critical elements of the structure of the LNG project. As part of the toll and repeal agreement, a mechanism is used to allocate LNG to project participants and monetize their gas applications. The number of third-party tolls in the United States is increasing due to increased commercialization of large gas reserves in areas with mature infrastructure and network access to liquefaction facilities. The many North American projects under development and at an early stage of conceptualization certainly show this growth.