Tellurian and Vitol sign 10-year LNG agreement for 3 mtpa

Tellurian announced today it has finalized a sales and purchase agreement with Vitol. The agreement is for three million tonnes per annum of LNG. The LNG would be delivered free on board from Tellurian’s planned Driftwood LNG export facility. Driftwood LNG is Tellurian’s proposed 27.6 mtpa liquefaction facility to be located near Lake Charles, Louisiana. The LNG for this agreement will be indexed to a combination of two indices: the Japan Korea Marker (JKM) and the Dutch Title Transfer Facility (TTF), each netted back for transportation charges. At today’s prices Tellurian noted the agreement is valued at approximately $12 billion in revenue over ten years.

President and CEO Octávio Simões said, “Tellurian continues to execute on our plan to market Driftwood LNG volumes on indices that our customers want. Vitol expressed interest in the development of Driftwood early on, and it is fulfilling to finalize this agreement with the world’s largest independent trader of energy. As the world electrifies and our population grows, the demand for reliable, low-cost energy will continue to increase. LNG provides a stable source of fuel at an attractive price, and Tellurian’s integrated model is positioned perfectly to offer volumes on JKM, TTF or blended price basis.”

Last week Tellurian and Gunvor announced a sales and purchase agreement for three million tonnes of LNG per annum for a ten year period. The Driftwood LNG terminal and associated pipeline have received all the necessary permits and licenses to begin construction. Co-founder and Executive Chairman of the Board of Tellurian Charif Souki said this week he was highly confident Tellurian would start construction of Driftwood LNG this summer.