US LNG export project developer Tellurian has signed a 10-year deal with trader Gunvor to supply liquefied natural gas from its Driftwood project in Louisiana.
Under the sales and purchase agreement, Tellurian would supply three million tonnes per annum on a free on board (FOB) basis to Gunvor Singapore, it said in a statement on Thursday.
In addition, the price will be indexed to a combination of two indices, the Japan Korea Marker (JKM) and the Dutch Title Transfer Facility (TTF), netted back for transportation charges.
The deal comes just two weeks after co-founder and executive chairman Charif Souki said Tellurian would finalize several commercial agreements for its planned 27.6 mtpa Driftwood project.
He said then the firm would probably sell 12-15 million tonnes of capacity over the next few weeks via Zoom.
If finalized, the capacity would be sufficient for the project’s first phase with a capacity of 16.6 mtpa.
$12 billion in revenue
“Tellurian intends to market up to 10 mtpa of LNG in our first phase on a JKM, TTF or blended price basis, as our integrated model provides the flexibility to offer this valuable product,” chief executive Octavio Simoes said in the statement.
Executive VP LNG marketing and trading Tarek Souki said, “at today’s LNG prices, this agreement represents the equivalent of approximately $12 billion in revenue over the 10-year term of the agreement.”
The Driftwood project has a preliminary $15.5 billion lump-sum turn key engineering, procurement and construction contract with Bechtel.
Charif Souki previously said Tellurian expected to give notice to proceed to Bechtel in the first quarter of next year but some construction work would start this summer.
This includes preparational work prior to the start of full construction activities.
Prior to this deal, France’s Total was the only company that made a firm commitment to support the project with a $500 million investment.