Tellurian signs SPA with Vitol for Driftwood LNG

NASDAQ-listed Tellurian said June 3 that it landed a sales and purchase agreement (SPA) to supply LNG from its planned Driftwood export facility in Louisiana to commodities trader Vitol.

The contract covers 3mn metric tons/year of supplies over a 10-year period, with Tellurian estimating the deal's worth at approximately $12bn. The deliveries will be made on a free-on-board basis, indexed to a combination of the Japan Korea Marker and the Dutch Title Transfer Facility.

Tullurian CEO Octavio Simoes said the agreement lines up with general trends toward a clean energy future.

“Vitol expressed interest in the development of Driftwood early on, and it is fulfilling to finalise this agreement with the world’s largest independent trader of energy,” he said. “As the world electrifies and our population grows, the demand for reliable, low-cost energy will continue to increase.”

Tellurian last month reached a 10-year deal to supply 3mn mt/yr of LNG from Driftwood to Vitol's rival Gunvor, bringing the project a key step closer to realisation.

France's Total signed a heads of agreement in 2019 to offtake 2.5mn mt/yr of LNG from the project and invest up to $900mn in its development. India's Petronet had expressed interest in becoming an investor and offtaker last year, but later ruled out its involvement.

Tellurian plans to market up to 10mn mt/yr of LNG supply from the first 16.5mm mt/yr phase of Driftwood. The company hopes to launch the terminal in 2025, but has yet to take a final investment decision because of delays securing customers for its gas.