Gas Tolling Agreement

Although such toll agreements, including provisions that give buyers control over generation, are increasingly common in Osprey`s power purchase activities and do not have an independent justification for the transaction. [3] In fact, the toll agreement is expected to expedite FERC`s approval for the transaction by allowing Duke to prove that it «already controlled» Osprey, so that «if Duke is allowed to directly acquire Osprey, no further damage could arise.» [4] Australian oil and gas companies Woodside and BHP have reached an agreement on toll prices for the transformation of gas from the Scarborough offshore field at Pluto`s Woodside LNG plant on the Burrup Peninsula in western Australia. The toll price is valid until 31 March 2020. Squadron Energy Group Australian Industrial Energy has signed a long-term lease with NSW Ports for a port site in Port Kembla, 112 km south of Sydney, for the development of the company`s planned LNG import terminal. In August 2014, Duke Energy Corporation (Duke) and Calpine Corporation (Calpine Corporation), a competing wholesale electricity vendor in Florida, agreed to purchase the Osprey Energy Center (Osprey), a combined natural gas and gas power plant in Florida, in Calpine. The structure of the proposed transaction included a toll agreement that gave Duke responsibility for determining the amount of electricity to be generated at Osprey and purchasing the fuel needed to generate that electricity. In essence, the toll agreement allowed Duke to take operational control of the Osprey facility and limited Calpine`s role to the «mechanical operation of the Osprey facility, in accordance with Duke`s instructions.» [1] This case highlights the importance of consulting with experienced HSR lawyers before acquiring voting shares, non-corporate interests or assets. Although the toll agreements in question are becoming more common in the energy sector, parties who have or may have an interest in acquiring the other party must be careful not to acquire the economic ownership of the offeree company before fulfilling the reporting obligations under the HSR Act if notification of the HSR was necessary. Otherwise, the toll agreement can be interpreted as proof of shooting and the acquiring person is liable to significant penalties of up to 40,654 $US per day for non-compliance. .

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