What is an off take agreement?

What is an off take agreement?

The offtake agreement is the agreement pursuant to which the off-taker buys all or a substantial portion of the output from the facility and provides the revenue stream supporting a project financing.

What is a supply and offtake agreement?

An offtake agreement is an arrangement between a producer and a buyer to purchase or sell portions of the producer’s upcoming goods. It is normally negotiated before the construction of a factory or facility to secure a market and revenue stream for its future output.

What is a gas offtake?

As used in project financing, an agreement to purchase all or a substantial part of the output or product produced by a project. By contrast, if the project is the construction of a pipeline, the output agreement would be a gas or oil transportation agreement.

What does off take mean?

1 : the act of taking off: such as. a : the taking off or purchase of goods. b : the amount of goods purchased during a given period.

What are the three types of off take agreements?

Some major types of off-take contracts are as follows:

• Take-or-pay contract.
• Power purchase contract.
• Take and pay contract.
• Long-term sales contract.
• Hedging contract.
• Contract for differences.

What is an offtake agreement in oil and gas?

Investopedia defines Offtake Agreements as contracts between the producers of a resource, in the case of project financing the producer is the project company, and a buyer of the resource, who is known as the offtaker, to sell and purchase all or substantially all of the future production from the project.

What is the meaning of concession agreement?

A concession agreement is a contract that gives a company the right to operate a specific business within a government’s jurisdiction or on another firm’s property, subject to particular terms.

What is offtake risk?

The risk attached to counterparties supplying feedstock or offtaking project product are usually termed ‘supply risk’ and ‘offtake risk’. These risks are associated with the inputs and outputs of a project and the failure of suppliers (or users) or offtakers to pay or otherwise perform their obligations.

What is offtake electricity?

‒ Offtake agreement is the agreement to “sell” power. from the project. ‒ Terms of the agreement affect its “financeability” ‒ Identity and credit quality of the offtaker is a crucial. consideration for potential lenders.

What is a gas distribution network?

Related Content. A gas transportation system that delivers gas to industrial, commercial and domestic customers. GDNs are supplied with gas from the national transmission system (NTS) but may also have gas entry points.

Who are the off takers?

Off-Taker means any legal entities, such as companies, corporations, business associations and other organisations including governmental authorities, which are constituted or otherwise duly organised under the law of a HOST CONTRACTING PARTY, and which purchase an INVESTMENT’s production or services on the basis of a …

What is offtake in beef production?

Percentage offtake refers to the number of animals a farmer sells annually as a fraction of his/ her total herd. It is an indicator of the business approach that farmer has with regards to his/ her livestock enterprise.