Tellurian signs ten-year LNG supply deal with energy trader Vitol

Tellurian has signed a long-term agreement with Switzerland-based energy trader Vitol to supply three million tonnes per annum (mtpa) of LNG.

Under the ten-year sales and purchase agreement (SPA), the commodity trader will receive three MTPA of LNG on a free on board (FOB) basis from Tellurian’s Driftwood LNG project.

Being built on the west bank of Calcasieu River in US state of Louisiana, the Driftwood LNG project involves the construction of a 27.6mtpa LNG terminal and 154.5km of feed gas pipeline.

Tellurian estimates the value of SPA, at today’s prices, at approximately $12bn in revenue over the agreed deal period.

Tellurian president and CEO Octávio Simões said: “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.”

Vitol CEO Ben Marshall said that the agreement will make Vitol one of the largest exporters of natural gas in North America, providing customers with cost effective and cleaner fuel solutions.

Tellurian recently signed a ten-year sales and purchase agreement (SPA) with Gunvor Singapore for 3mtpa of LNG, also from Driftwood LNG.

Tellurian LNG Marketing & Trading executive vice-president Tarek Souki said: “Tellurian has made exceptional progress on our intended first phase capacity sales by securing this second SPA with another respected global energy trading business.

“The two recent agreements represent an aggregate of $24bn in estimated revenue. We will continue to be deliberate and selective in choosing our additional customers.”

The Driftwood LNG project, which will process the gas feed from the existing interstate pipeline system, is planned to be commissioned in 2023.