US LNG developer Tellurian announced last week that it had signed a sales and purchase agreement (SPA) with Royal Dutch Shell for offtake from its planned Driftwood LNG export terminal in Louisiana.
The SPA is the third that Tellurian has finalised in the past 10 weeks and brings the company’s total offtake commitments to 9mn tonnes per year (tpy) – covering almost all of Driftwood’s first phase of 9.2mn tpy.
The deal covers the sale of 3mn tpy of LNG to Shell over a 10-year period – similar to agreements with commodity traders Vitol and Gunvor that Tellurian has announced in recent weeks. The LNG will be indexed to a combination of two indices – the Japan Korea Marker (JKM) and the Dutch Title Transfer Facility (TTF), each netted back for transportation charges.
Tellurian said the offtake agreements are sufficient to support the launching of its first two plants at Driftwood and that it would now focus on financing the project. The company is targeting early 2022 for giving its engineering, procurement and construction (EPC) contractor, Bechtel, notice to proceed.
Driftwood would have a total capacity of 27.6mn tpy from up to 20 small liquefaction trains built in four phases. The company has now opted for a first phase consisting of two plants, each with four trains.
The SPA comes after Tellurian and France’s TotalEnergies recently terminated a supply agreement that would have also seen the French company become an equity participant in Driftwood.

 

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