Japanese Utilities Osaka Gas and Chubu Electric Commit to Novel Tolling Agreement Approach
HOUSTON, July 31, 2012 – King & Spalding’s global energy practice has advised Freeport LNG on the liquefaction tolling agreements for the first of three proposed liquefaction trains to be built near Freeport, Texas, at Freeport LNG’s existing LNG import terminal. All three trains are expected to be fully subscribed by the end of 2012 and, once completed, will be capable of liquefying approximately 13.2 million tons per annum of natural gas.
Freeport LNG’s liquefaction tolling agreements with Osaka Gas Co., Ltd. and Chubu Electric Power Co., Inc. will cover 100% of the first train’s liquefaction capacity. Subject to regulatory approval and a final investment decision, Osaka Gas and Chubu Electric will each acquire rights to 2.2 million tons per annum production capacity of the first train over an initial 20-year term.
King & Spalding will continue to represent Freeport LNG on the two remaining trains of the liquefaction project, with definitive agreements for both expected before year-end. The firm also represented Freeport LNG on the front-end engineering and design (FEED) contract for the facility earlier this year.
For more information about the project, visit www.freeportlng.com.
Philip R. Weems (co-head of King & Spalding’s global energy practice) and associates Monica Hwang and Matthew Salo represented Freeport on the structuring, drafting and negotiation of the liquefaction agreements on the first liquefaction train and are representing Freeport on the negotiation of the definitive agreements on the two remaining trains. Partner Scott A. Greer (head of the firm’s construction transactional practice) and associate Robert B. Garner advised Freeport on the FEED contract and are representing Freeport on the negotiation of the EPC contract for the facility.
King & Spalding’s LNG team is one of the most active and experienced in the world. The group has expertise in every aspect of the field, from upstream projects and liquefaction to construction, financing, transportation, sales, import projects and downstream gas marketing. In addition, many of our team members have served in key in-house roles at leading global energy companies and as leaders of energy industry trade groups, providing us more than two decades of unique insight into the commercial aspects of the business.
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