Texas LNG executed non-binding term sheets with four independent buyers in South East Asia and China for a volume of 3.1 million tons per year from its project to be located at the Port of Brownsville’s deepwater ship channel.
According to the company’s statement, buyers include a mix of state-owned and private entities that currently own, or plan to construct LNG receiving facilities in the next few years.
With options included in the term sheets, the offtake volumes could rise to approximately 4 mtpa, as the company is currently marketing the Phase 2 capacity.
The project’s Phase 1 (Train 1) capacity, of 2 million tons per year has been oversubscribed, which is necessary for attaining the final investment decision.
The term sheets provide the commercial foundation for Texas LNG to continue negotiating definitive 20-year liquefaction tolling agreements and sale and purchase agreements.
Under the terms of the LTAs, Texas LNG will be paid monthly capacity fees to liquefy natural gas, store it, and deliver it onto LNG ships arranged by the LNG buyer.
Texas LNG is also promoting an SPA structure, whereby it is responsible for delivering LNG on an FOB or DES basis.
Langtry Meyer, Founder & COO of Texas LNG noted that securing the customers for Phase 1 capacity of the project is sufficient to reach FID in 2018.
Texas LNG expects the production from its first liquefaction train to start in 2021-2022.