Tellurian inks long-term lease for Driftwood LNG site

US LNG firm Tellurian has exercised a long-term site lease option for its planned Driftwood project in Louisiana.

The company said in a statement it has signed the deal on Tuesday with Lake Charles Harbor and Terminal District on the 477 acre site in Sulphur, Louisiana.

Furthermore, Tellurian says the ground lease agreement has an initial term of 20 years with extension options of up to 50 years.

“Tellurian is taking necessary steps to prepare for Driftwood LNG construction by entering into this long-term lease and executing certain projects such as road improvements and utility relocation,” chief operating officer Keith Teague, said.

Carl Krielow, president of the board of commissioners of the Lake Charles Harbor and Terminal District said, “Driftwood LNG will bring over 6,500 construction jobs, about 400 operational jobs and millions of dollars in tax revenue and spending to Southwest Louisiana.”

Charif Souki, Tellurian’s co-founder and executive chairman, said last week Tellurian would soon sign the lease agreement as it looks to start works on preparing the construction site.

Souki said that Tellurian has to complete three things to prepare the site for full construction including widening a state highway, relocating a pipeline that crosses the property now, and some soil preparation.

Souki confirmed that the firm plans to give notice to proceed to contractor Bechtel in the first quarter of next year.

In addition, Tellurian has recently signed two agreements with Vitol and Gunvor. Combined the two deals represent an aggregate of $24 billion in revenue and six mtpa of contracted volumes over the ten-year period.

The firm plans to build the proposed 27.6 mtpa Driftwood project in two phases. The first phase would have a capacity of 16.6 mtpa. This phase could go online in 2025.

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