Tellurian’s Driftwood LNG takes deals total to $24Bln over 10 years as Vitol signs for cargoes

Tuesday, 08 June 2021
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LNG News Editor: 

Tellurian Inc., the developer of the Driftwood LNG export project in Louisiana, has finalized a second LNG supply deal with international commodities company Vitol after previously signing another agreement in late May with Vitol’s market trading rival Gunvor.

Tellurian’s LNG sales and purchase agreement (SPA) with Vitol is for 3 million tonnes per annum on a free-on-board (FOB) basis for a 10-year period.


The volumes will be indexed to a combination of two indices, the Japan Korea Marker (JKM) for North Asian spot cargoes and the European benchmark Dutch Title Transfer Facility (TTF), each netted back for transportation charges, the same terms as the Gunvor deal.

Tellurian said that at today’s prices, each of these SPAs is valued at around $12 billion in revenue over 10 years for the Gulf Coast venture with proposed total output of over 27 MTPA.

Tellurian had earlier signed a supply deal with Gunvor to give the Driftwood project some momentum after several years of firms declining to commit to long-term contracts.

“Vitol expressed interest in the development of Driftwood early on, and it is finalizing this agreement,” explained Tellurian President and Chief Executive Octávio Simões.

“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,” added Simões.

Tellurian’s Executive Vice President LNG Marketing and Trading Tarek Souki added that the company had made exceptional progress in the first phase capacity sales by securing this second SPA.

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

Pablo Galante Escobar, Global Head of LNG and European Gas and Power at Vitol, said the firm was excited to conclude this agreement with Tellurian.

“Our long-term commitment and investment-grade rating will help Tellurian as they continue their path to financial close,” he added.


Tellurian had hinted in its first-quarter earnings report at the start of May 2021 that the improving market favoured the signing soon of supply agreements.

The Houston, Texas-based company said it continued to build its Gulf Coast natural gas business and had concentrated on paying down debt.

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