Magnolia LNG, an export terminal planned for Lake Charles, is a step closer to securing enough buyers for the 8 million tons of liquefied natural gas it expects to produce each year.

Magnolia announced Monday that it had entered into a non-binding heads of agreement with Vessel Gasification Solutions — a group developing the first import terminal on India’s East Coast, Krishna Godavari LNG — for a 20-year supply of LNG at 4 mtpa, half the anticipated 8 mtpa.

Whether the heads of agreement will lead to a binding agreement is contingent upon the financial close of the East India terminal and the satisfaction of credit requirements by VGS.

Magnolia CEO Greg Vesey said the agreement “represents another important step forward” for the Magnolia project.

“We look forward to supplying long-term volumes to the Indian market to meet their growing needs for clean energy,” Vesey said.

VGS President Gaurav Tiwari said the heads of agreement puts VGS “in a prime position” to carry out its plan to construct the first import terminal on India’s East Coast, which comes as India faces a natural gas shortage and looks for cost-effective import opportunities.

“We are very excited to take this step forward in our relationship with Magnolia, and we look forward to working with the Magnolia team to bring a significant tranche of U.S.-produced LNG to a key new market on the East Coast of India,” Tiwari said.

Magnolia plans to build four liquefaction production trains on Port of Lakes Charles property. It has completed the federal regulatory process and received approval to ship to non-free trade agreement countries.

Its final hurdle before breaking ground is getting companies to enter binding purchase agreements for its 8 mtpa supply, but it only has one buyer so far.

Magnolia in July 2015 entered into a binding agreement with Meridian LNG for 2 mtpa. The two recently extended Magnolia’s financial close date condition precedent from December 2016 to November 30, 2017, giving Magnolia one more year to get enough buyers for the offtake.

If Magnolia can reach a binding agreement with VGS for the 4 mtpa, it will only have 2 mtpa left to sell in 2017.