Another multibillion-dollar deal for Driftwood: Energy trader Vitol signs on

(Courtesy Tellurian Inc.) An artist's rendering of the proposed Driftwood LNG facility near Lake Charles.

Tellurian has finalized another LNG sales-and-purchase agreement—this one with energy trader Vitol.

According to an announcement late last week, the deal is for 3 mtpa on a free on board basis at Driftwood LNG for a 10-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 deal follows a similar 10-year, 3-mtpa agreement Tellurian inked with commodity trader Gunvor Group announced about 1 week ago.

Each deal is worth about $12 billion in revenue over the contract period. Driftwood LNG is a proposed 27.6-mtpa LNG production and export terminal on the west bank of the Calcasieu River, south of Lake Charles.

Previously, Tellurian’s only firm commercial deal tied to Driftwood LNG had been a 2019 agreement with France’s Total.

Tellurian President and CEO Octavio Simoes

“Tellurian continues to execute on our plan to market Driftwood LNG volumes on indices that our customers want,” said Tellurian President and CEO Octávio Simõe. “Vitol expressed interest in the development of Driftwood early on, and it is fulfilling to finalize this agreement with the world’s largest independent trader of energy.”

Driftwood has a preliminary $15.5-billion lump-sum turnkey engineering, procurement, and construction contract with Bechtel. Notice to proceed is expected in Q1 2022, Co-Founder and Executive Chairman Charif Souki said in May during the Citi Global Energy & Utilities Virtual Conference.

Read the announcement.