Tellurian Inc., developer of the Driftwood LNG export plant with volumes taken by leading commodities firms Gunvor and Vitol, will soon sign a long-term lease near Lake Charles in Louisiana so it can begin preparing the site for full construction.
Tellurian executive Chairman Charif Souki explained the latest plans in a message to investors.
The Houston, Texas-based company is moving ahead after signing firm deals in late May and early June 2021 with commodity trading firms Gunvor and Vitol for a combined 6 million tonnes per annum of cargoes from the Driftwood plant.
Each of the firm agreements is for a period of 10 years with the supply indexed to a combination of the Japan-Korea Marker for Asian spot cargoes and the European benchmark Dutch Title Transfer facility (TTF) price.
The engineering, procurement and construction contract has already been agreed with Bechtel Inc., the leading global builder of LNG export facilities.
The Driftwood plant with production capacity of around 27 MTPA will be built on the west bank of the Calcasieu River, just south of Lake Charles.
Tellurian has also filed a formal application with the US Federal Energy Regulatory Commission to build a new 37-mile pipeline in Louisiana that will originate near Ragley in Beauregard Parish and end near Carlyss in Calcasieu Parish, near where the Driftwood facility will be located.
Tellurian had prevously planned to build four pipelines connecting supplies in the US Gulf Coast region, before deferring three of them because of commercial challenges.
“Look for that lease to be signed, effected and announced so that we can start the work that we need to do this summer. The activities will be taking place this summer,” stated Souki.
The company has noted that to get the Driftwood LNG plant site ready for full construction, a state highway needs to be widened to accommodate traffic for 5,000 workers, while a pipeline currently crosses the plant site and needs to be relocated.
“The new pipeline has been designed and routed to connect the supply located 21 miles north of Lake Charles to the demand located within and south of Lake Charles, bypassing what has become a constrained, complex and expensive transportation pathway,” said Tellurian after making its FERC filing.
As part of the design, the Driftwood Pipeline is proposing to deploy Baker Hughes-supplied electric-driven compression, thereby reducing the pipeline’s carbon-dioxide emissions.
“This new and completed pipeline design provides definitive and measurable results for emissions reduction and is another step in Tellurian’s overall strategy to support and balance the world’s energy needs,” said Tellurian President and Chief Executive Octávio Simões.
“Our latest commercial agreements have included provisions for tracking and documentation of LNG cargo emissions. Tellurian will continue to explore ways to collaborate with the US Administration and contribute to its plan for a cleaner climate with a focus on upending energy poverty domestically and abroad,” stated Simões.
