Switzerland-based energy trader Gunvor has entered into a non-binding agreement to procure LNG from LNEnergy's proposed facility in Italy.  

The LNG production plant, located at the Colle Santo onshore gas field, will supply Gunvor with approximately 44,000t of LNG annually for a minimum of five years. 

UK-based Reabold Resources, which holds a 26.1% stake in LNEnergy, announced the heads of agreement (HoA), outlining the terms for the LNG purchase.  

LNEnergy holds the exclusive right to acquire a 90% stake in the Colle Santo gas field. 

According to GlobalData, the Colle Santo project is expected to start production in 2025 and reach its peak in 2028.  

Production will go on until the field reaches its economic limit in 2066, according to economic projections. 

The LNG will be sold at the truck loading flange of the plant and subsequently transported by truck within Italy.  

The pricing for the LNG will be in line with the Italian PSV price, and the contract is set for an indefinite period with a minimum duration of five years. 

The HoA also includes a clause for a potential prepayment by Gunvor for a portion of the initial five years' supply, amounting to roughly 66,000t or 999,000 megawatt-hours of LNG.  

This prepayment is contingent upon finalising definitive transaction documents and LNEnergy securing the necessary permits to build and operate the production facility. 

LNEnergy and Gunvor aim to finalise a comprehensive LNG sale and purchase agreement within the next six months, based on the HoA.  

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." 

In March this year, Texas LNG, a subsidiary of Glenfarne Energy Transition, signed an HoA with Gunvor Singapore for a 20-year LNG free-on-board sale and purchase agreement.  

This contract involves 500,000t per annum of LNG from Texas LNG's planned four million tonnes per annum export terminal in the Port of Brownsville, Texas.