What Is A Tolling Agreement Lng

The choice of legal provisions and dispute resolution rules should be uniform in the documentation of projects and in the various toll agreements. If there were to be a dispute within the framework of the toll agreements, it is very likely that several parties, if not all, using the same common or common facilities, will be affected. The dispute resolution process is streamlined and more effective when all parties to the dispute are involved in the same dispute resolution process. Experts are often used as a dispute resolution option when technical or financial disputes arise. Again, these provisions cannot be available without continuity between dispute agreements if not all parties are subject to the same dispute resolution and expert provisions. As part of a toll agreement, the toll company provides fuel to a power plant operator and buys the electricity as a product and then markets it. Feldman said the agreements had begun a significant cog in risk allocation in the sector and were based on a different cost-effectiveness than the original independent electricity projects. Continuity in project agreements should be both in content and terminology. The most critical is that the toll agreement will likely reflect certain conditions agreed with LNG buyers in the SPAs, especially when the LNG buyer arranges transportation and adopts LNG at LNG export facilities. For example, port terms of use, which apply to liability and procedures (sometimes called terms of use) and requirements for notification of approaching vessels, restrictions on the delivery of documents and access to facilities and other documentary interfaces, require a high degree of consistency in both the toll agreement and the ARS.

It is likely that LNG buyers will need continuity and that continuity will allow the taxpayer to fulfill its obligation to sell under the GNP. Bird stated that the energia Costa Azul agreements, Sempra`s liquefaction extension project in Ensenada, Mexico, and Port Arthur are based on the sales and sales contract (SPA) model and not on toll prices.