Letter of Intent
(Natural Gas Storage)

Summary

This template is a letter of intent for a contemplated transaction involving the purchase and/or development of a natural gas storage facility project. It may also be used for developing natural gas gathering facilities. It outlines key terms of a future definitive agreement, but is not a binding agreement itself. This template includes practical guidance, drafting notes, and optional clauses. When parties are interested in entering into a commercial agreement they often begin discussions by trading draft letters of intent that outline key headline terms to the eventual definitive agreement. Letters of intent may go into significant detail regarding the proposed transaction, but are generally non-binding. While they may show the general outline of a proposed transaction, specific terms may change in the due diligence process, or as economic realities change as the parties get closer to consummation of the ultimate transaction. While generally non-binding, letters of intent are still vitally important for commercial deal-making, as they help the parties level-set expectations and come to a meeting of the minds on large-scale issues. The letter of intent contains certain terms which are binding on the parties, such as with respect to confidentiality obligations, and other terms which are not binding including the obligation to proceed with the contemplated transaction and the proposed terms of the deal. The letter of intent may need to be revised depending upon the particularities of the anticipated transaction. Here, the letter of intent memorializes that the transaction involves the formation of a new company by the purchaser, while disclaiming any obligation by either party to be bound by these preliminary terms or to consummate the transaction. For additional information on drafting letters of intent, see Letters of Intent, Letters of Intent in Private M&A Deals, and Letters of Intent in Public M&A Deals. To review other letters of intent to compare style and content, see Letter of Intent (Joint Venture, Majority/Minority) and Letter of Intent (Asset Acquisition).