While lenders may require different forms of security, guaranteeing the source of revenue from the sale of LNG and by-products is essential not only for banks, but also for other project participants. It is typical that a loyalty agreement (often offshore, for investments in developing countries) is created and a paying body is designated. This gives banks and project participants a guarantee on revenues. The use of a secure trust contract gives banks the comfort of having control of the project`s debt proceeds, (ii) the toll company guarantees that their toll is paid, and (iii) project participants ensure that payment is made for the liability of a toll company. As part of the development of the annual delivery program and the 90-day schedule, project participants must also agree on conditions for or implementing changes to the annual delivery program and procedures for assigning surplus records on a ratible and fair basis. The cooperation and agreement of all project participants is essential for this planning process. Bird stated that the energia Costa Azul agreements, Sempra`s liquefaction extension project in Ensenada, Mexico, and Port Arthur are based on the sales and sales contract (SPA) model and not on toll prices. Traditionally, liquefaction projects have been linked to the development of upstream gas resources – and gas was put on the market from an isolated site. However, in the United States, there is an active competitive gas market that LNG players can easily use to access the U.S. shale gas base and the accompanying pipeline network.
U.S. LNG projects thus dissect access to liquefaction resources, allowing the use of different business models – capacity toll agreements. This paper highlights (i) a number of findings that need to be addressed during the structuring phase of the development of the project and (ii) the need for consistency of documents in toll agreements with different parties. It is not an exclusive list of important considerations; it merely illustrates the complexity and importance of previous decision-making issues in the process of structuring and properly documenting the toll system. Ideally, a toll system will establish a uniform accountability system, with clearly defined remedies, applied consistently and non-discriminatoryly. The liability and recourse regime applies to toll parties, operators or operators, facility owners, lift coordinators, vessels using LNG facilities and other project participants.