LONDON: Reabold Resources plc, an investment entity dedicated to strategic gas projects, has announced the signing of a preliminary Heads of Agreement (HoA) with Gunvor International B.V. and LNEnergy Limited. This agreement marks a pivotal step in the purchase of liquefied natural gas (LNG) from the Colle Santo gas field in Italy.

Under the HoA, Gunvor, a global commodities trading giant, will procure approximately 44,000 tonnes of LNG annually from LNEnergy’s small-scale production facility at Colle Santo. LNEnergy, which is poised to secure a 90% stake in the gas field, has Reabold Resources as a significant shareholder with a 26.1% equity interest.

The sale point for the LNG will be the truck loading flange at the Colle Santo facility, with subsequent delivery across Italy by truck. The pricing structure for the LNG is set to align with the Italian PSV price, ensuring competitive rates in the market. The contract, while indefinite, guarantees a minimum duration of five years.

Additionally, the HoA outlines a potential prepayment agreement from Gunvor for a portion of the LNG deliveries over the first five years, amounting to roughly 66,000 tonnes or 999,000 MWh. This prepayment hinges on the finalization of transaction documents and LNEnergy’s successful acquisition of permits for the construction and operation of the LNG facility. The current average forward Italian PSV gas price for 2025-2030 stands at approximately €30 per MWh.

Over the next six months, LNEnergy and Gunvor will engage in negotiations 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 field.

Gunvor, renowned for its strategic investments in industrial infrastructure and logistics solutions, reported a staggering US$127 billion in revenue in 2023, trading 177 million MT of volumes. As a leading independent global trader of LNG, Gunvor continues to create value and provide energy solutions where they are most needed.

Stephen Williams, Co-CEO of Reabold commented: “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.”

Reabold Resources boosts stake in LNEnergy and Colle Santo gas field