Tellurian inks two Driftwood LNG deals with Shell
US natural gas company Tellurian said July 29 it had signed a pair of LNG sales and purchase agreements (SPAs) with Anglo-Dutch major Shell covering 3mn mt/yr from the pending Driftwood LNG project in Louisiana.
Each of the SPAs are for a term of 10 years on a free-on-board basis and are indexed to a combination of both the Japan Korea Marker (JKM) and the Dutch Title Transfer Facility (TTF), netted back for transportation charges.
The agreements represent the third deal Tellurian has finalised for Driftwood offtake in the last 10 weeks, committing a total of 9mn mt/yr from the first two 5mn mt/yr trains at the terminal.
“With these SPAs, we have now completed the sales to support the launching of the first two plants,” Tellurian CEO Octavio Simoes said. “Tellurian will now focus on financing Driftwood, in order to give Bechtel notice to proceed with construction in early 2022.”
The integration of Driftwood into Tellurian’s natural gas value chain gives it the ability to accurately measure well to loading arm emissions, which fits well with Shell’s commitment to offer CO2-neutral LNG cargos to its customers, Simoes added.
“LNG demand is expected to nearly double by 2040,” Shell Energy EVP Steve Hill 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.”