Vitol agrees to 3 million mt/year deal with Tellurian for Driftwood LNG supplies

Energy trader Vitol has signed a 10-year Sales and Purchase Agreement to buy 3 million mt/year of supply from Tellurian's proposed Driftwood LNG export terminal in Louisiana, Tellurian said in a statement on June 3.

The agreement comes on the heels of a similar SPA for offtake from Driftwood signed between Gunvor and Tellurian only a week earlier for the same volume of LNG over the same 10-year period.

The two deals mark a significant advancement for Tellurian in its commercial efforts after a two-year lull in firm activity.

Previously, Tellurian's only other firm commercial deal tied to Driftwood that has been announced to date is a 2019 agreement with France's TotalEnergies that covers 1 million mt/year of partner volumes and 1.5 million mt/year of marketing volumes.

The deal with Vitol, again similar to the one with Gunvor, indexes the supply to a combination of the Platts JKM and Dutch TTF, netted back for transportation charges. The LNG would be delivered free on board from Driftwood, Tellurian said.

Tellurian estimated the value of the agreement at approximately $12 billion over ten years at today's prices.

This additional SPA brings Tellurian one step closer to taking a final investment decision on Driftwood, which is currently being targeted for the first quarter of 2022.

"This agreement will make Vitol one of North America's largest exporters of natural gas, providing our customers with cost effective and cleaner fuel solutions," Vitol CEO Ben Marshall said.

"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," said Tellurian President and CEO, Octávio Simões.