Tellurian and Shell Finalize 10-Year LNG Deal
Tellurian Inc. (NASDAQ: TELL) has announced that it has finalized liquefied natural gas (LNG) sale and purchase agreements (SPAs) with Shell NA LNG.
The company outlined that the SPAs are on a free on board basis at Driftwood LNG for a combination of three million tons per annum (Mtpa) for a ten year period, 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.
The agreements mark the third deal Tellurian has finalized in ten weeks, totaling nine Mtpa and nearly all of the capacity of Driftwood LNG’s first two plants, Tellurian noted. In June, Tellurian announced that it had finalized LNG SPAs with Vitol Inc. for three Mtpa over a ten year period. In May, Tellurian and Gunvor Singapore Pte Ltd announced an LNG SPA for three Mtpa for a ten year period.
“Tellurian welcomes Shell to the Driftwood project,” Tellurian President and Chief Executive Officer, Octávio Simões, said in a company statement.
“Shell manages one of the largest and most diverse portfolios of LNG in the world and is leading the industry in delivering CO2e neutral LNG cargoes. Owing to Driftwood’s integrated project, our ability to accurately measure well to loading arm emissions and reduce emissions where operationally possible, further enables Shell’s CO2e neutral LNG offering,” the Tellurian head added.
“With these SPAs, we have now completed the sales to support the launching of the first two plants. Tellurian will now focus on financing Driftwood, in order to give Bechtel notice to proceed with construction in early 2022,” he went on to say.
Steve Hill, the executive vice president of Shell Energy, said, “this deal secures additional competitive volumes for our portfolio by the mid-2020s, enabling us to continue providing diverse and flexible LNG supply to our customers”.
“We look forward to working with Tellurian,” the Shell representative added.
Driftwood LNG, which is Tellurian’s first project, is a 27.6 Mtpa LNG facility near Lake Charles, Louisiana. The project has all the required permitting to begin construction and has achieved “significant commercial momentum”, Tellurian notes on its website. The management team at Tellurian has collectively delivered over 79 million tons of LNG through over the past 50 years, Tellurian’s website notes.
To contact the author, email email@example.com
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
Editor | Rigzone