Commodity trader Gunvor signed a decade-long agreement to buy 3M tonnes per annum (mta) of LNG from Texas-based natural gas provider Tellurian’s proposed Driftwood LNG export terminal in Louisiana
Under the sales and purchase agreement, the supply is indexed to a combination of the Platts Japan Korea Marker (JKM) and Dutch Title Transfer Facility (TTF), netted back for transportation charges.
LNG will be delivered free on board from Tellurian’s 27.6-mta Driftwood facility and the company’s executive vice president, LNG marketing and trading Tarek Souki estimated that at current LNG prices, “the agreement represents the equivalent of approximately US$12Bn in revenue over the 10-year term of the agreement.”
Tellurian president and chief executive Octávio Simões said the company intends to market up to 10 mta of LNG in its first phase on a JKM, TTF or blended price basis.
He said, “We welcome Gunvor, the largest independent global trader of LNG volumes, to Driftwood and look forward to providing a cleaner fuel to meet growing global energy needs and enable energy access.”
The deal is an advancement for Tellurian’s commercial efforts, after a two-year lull in firm activity. At present, the only other firm commercial deal tied to the Driftwood project is a 2019 agreement with Energy major Total that covers 1 mta of partner volumes and 1.5 mta of marketing volumes.
Tellurian has pushed back the FID for Driftwood from 2021 to 2022.
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