Reabold Resources, Gunvor, and LNEnergy sign LNG deal to enhance European energy security

Reabold Resources plc, an investment company dedicated to developing strategic gas projects for European energy security, has announced a non-binding Heads of Agreement (HoA) with Gunvor International B.V. and LNEnergy Limited. This preliminary agreement outlines the terms for Gunvor to purchase liquefied natural gas (LNG) from LNEnergy’s upcoming production facility at the Colle Santo gas field in Italy.

Details of the LNG Purchase

According to the HoA, Gunvor International B.V. will buy approximately 44,000 tonnes of LNG annually from LNEnergy Limited, which is set to acquire a 90% interest in the Colle Santo field. Reabold Resources holds a 26.1% equity interest in LNEnergy. The sales point will be the truck loading flange at LNEnergy’s small-scale LNG plant, with subsequent delivery across Italy. The pricing for the LNG will align with the Italian PSV (Punto di Scambio Virtuale) market rates.

Reabold Resources, Gunvor, and LNEnergy sign LNG deal to enhance European energy security

Prepayment and Contract Terms

An interesting aspect of this deal is the potential prepayment arrangement. Gunvor may prepay for about 66,000 tonnes of LNG, equating to 999,000 MWh, covering a portion of the initial five years of deliveries. This prepayment hinges on finalizing the definitive transaction documents and LNEnergy securing the necessary permits for constructing and operating the LNG facility. The contract is set for an indefinite period, maintaining a minimum duration of five years.

Future Negotiations and Agreement Finalization

Over the next six months, LNEnergy and Gunvor will aim to finalize a comprehensive LNG sale and purchase agreement. During this period, LNEnergy will exclusively negotiate with Gunvor for the sale of LNG from the Colle Santo gas field. This exclusive negotiation window underscores the strategic importance of the deal for both parties involved.

The deal between Reabold Resources, Gunvor International, and LNEnergy not only enhances the LNG supply chain within Italy but also significantly contributes to European energy security. By aligning the LNG price with the Italian PSV price, the agreement ensures competitiveness and market adaptability. The prepayment provision might also provide financial stability and funding for the initial operations of the LNG production facility.

This arrangement signifies a substantial forward step in securing a stable energy future for Europe, leveraging Italy’s strategic position and resources. As negotiations progress towards a definitive agreement, the energy sector will keenly watch how this partnership develops, potentially setting a benchmark for similar projects across the continent.