The agreement provides enough natural gas to enable the company to produce 4 million tons per annum (mtpa) of LNG. The agreement represents one third of the gas needed for the entire project (12 mtpa) with terms that allow for additional supply.
SCT&E LNG currently has approval from the Department of Energy to export 12 mtpa to countries with whom the U.S. has a Free Trade Agreement. Greg Michaels, Chairman and CEO of SCT&E LNG, states, "During our recent 45-day trip to Asia and South America meeting with potential investors and offtakers, we received extremely positive feedback on the potential for a long-term fixed-price natural gas supply. A number of prospective customers consider our offering as a hedge against future unknown gas prices. The MOU provides our customers with a fixed-price commercial structure they can bank on to build their economies and deploy 20-plus year assets with measureable and predictable results. This agreement represents another significant milestone in our project."
The SCT&E LNG business model seeks to export LNG via take-or-pay tolling arrangements with its customers. Mr. Michaels continues, "Our business model has been designed to provide our shareholders with the potential for maximum return while limiting exposure on their investment. To date, all project activities have been self-financed, which include a signed long-term lease option for our project site, multiple project feasibility studies, key staff hires, the opening of our corporate headquarters in Houston, Texas, and the secured feedstock for 4 mtpa of our authorized 12 mtpa project. To be at this stage of a $9 plus billion dollar project with zero debt is something our team is very proud of."
