Global Energy Ventures Ltd (ASX:GEV) has had its gas sales agreement (GSA) conditions precedent with Meridian LNG Holdings Corp and Uniper Global Commodities SE extended.
The agreement aims to secure Port Meridian gas volume rights and gas sale rights to Uniper of up to 300 million standard cubic feet a day.
The deadline to secure a deal has been pushed to December 31, 2019, and January 1, 2021, for commercial operability.
Gas volume and sales rights are subject to UK regulatory clearances and the execution of a tolling terminal agreement and gas assignment agreement, for Port Meridian capacity and gas sales to Uniper, respectively.
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GEV chairman & CEO Maurice Brand said: “GEV is pleased with the extension by Uniper for another 12 months.
“With both the strengthening UK gas prices and GEV recently completing requirements in order to obtain full design class approval for the CNG 200 Optimum ship, we are well placed to accelerate our marketing to parties that hold gas resources within 2,500 kilometres of Port Meridian.”
GEV has also agreed with Meridian to advance funding of up to an aggregate of US$240,000, on an equal quarterly basis during the 2019 calendar year.
The company has completed testing requirements for the CNG 200 Optimum ship and short-listing of four shipyards.
This allows GEV to now actively pursue identified gas resources that are technically and commercially suitable for compressed natural gas within 2,500 kilometres of Port Meridian.
READ: Global Energy Ventures completes ABS testing program for CNG Optimum ship
In December last year GEV acquired a 5% equity interest in Meridian for a US$2-million consideration.
The transaction granted GEV gas volume rights at Meridian’s proposed Port Meridian terminal in the UK as well as gas sale rights to Uniper.
Meridian is well-placed to complete, at a modest cost, previous engineering work associated with the Port Meridian site within a 12-month timeframe.
READ: Global Energy Ventures nears full design approval for CNG Optimum natural gas carrier
The UK gas market continues its dependence on imported supplies which now accounts for more than 50% of the market, including European pipeline gas and LNG imports.
The closure of the rough storage facility (the country’s largest) in 2017 has also resulted in the UK market focusing on imported gas which will further open it up to reliable, economic and flexible contracting terms.
Britain’s wholesale gas market is unique in that it has one price for gas regardless of its point of origin.
This mechanism is referred to as the national balancing point (NBP) price of gas.
During 2017-18 the NBP saw a sustained increase with market forecasts indicating a range of US$7-$8 per million British thermal units is sustainable through to 2021 given only 30% of gas contracts are priced using oil.