Document ID: chunk:federal_register_of_legislation:F2023N00066:clause:2_8:p6
Version: federal_register_of_legislation:F2023N00066
Segment Type: clause
Provision Reference: sch 2 cl 8 (pt 6/8)
Character Range: 21330–24259

project must supply under a protected long-term contract. In determining the minimum volume the LNG project must supply, the LNG project's lack of discretion to supply a volume in the relevant period is the relevant test.
            Example: An LNG project (the seller) has a long-term LNG Supply and Purchase Agreement (SPA) with a foreign energy utility (the buyer). The SPA stipulates: 1) 5 million tonnes of LNG will be delivered annually 2) the buyer can exercise the option to have an additional 1 million tonnes of LNG delivered in any given year, at a price agreed between buyer and seller. In 2024, the buyer and seller agree a price and the buyer calls in its option to have the additional 1 million tonnes delivered in 2024. The long-term contract gas for 2024 is 6 million tonnes for the SPA.
          1. Long-term contract gas cannot be increased as a result of renegotiating or otherwise updating a protected long-term contract. Where the minimum volume the LNG project must supply increases as a result of renegotiating or otherwise updating a protected long-term contract, the contract's long-term contract gas is the long-term contract gas in the original agreement that was renegotiated or updated.
    (4)    For the purposes of determining long-term contract gas, a protected long-term contract is an agreement which underpinned the final investment decision of the LNG project. These agreements include, but are not limited to, Heads of Agreement and memorandums of understanding that later evolved into an LNG Supply and Purchase Agreement.
          1. A protected long-term contract may be executed before or up to 12 months after the LNG project's final investment decision.
          2. The Minister may consider a renewed agreement, or an agreement formalising an earlier agreement, to be a protected long-term contract, provided the original agreement underwrote the final investment decision of the LNG project.

LNG project may write to the Minister to confirm long-term contract gas
    (5)    To provide greater certainty to LNG projects, an LNG project may write to the Minister seeking recognition of the long-term contract gas under a protected long-term contract. Such a request should annex the protected long-term contract.
    (6)    Following such a request, if the Minister determines the annex is a protected long-term contract, the Minister will cause Schedule 2 of these Guidelines to be updated. The update will specify:
          1. the LNG project (the seller);
          2. the buyer;
          3. the date the protected long-term contract was executed; and
          4. the protected long-term contract's long-term contract gas, disaggregated by any future specified delivery timing.
    (7)    In recognition that a protected long-term contract may have a seasonal profile (where the timing of the delivery is specified in the protected long-term contract), Schedule 2 of these