Tellurian Inc (NASDAQ: TELL) has announced that it has finalized a liquefied natural gas (LNG) sales and purchase agreement (SPA) with Vitol Inc.
The deal is for three million tons per annum, on a free on board basis at Driftwood LNG, for a ten-year period, indexed to a combination of two indices; the Japan Korea Marker (JKM) and the Dutch Title Transfer Facility (TTF), Tellurian revealed. At today’s prices, the agreement is valued at approximately $12 billion in revenue over ten years, Tellurian outlined.
“Tellurian continues to execute on our plan to market Driftwood LNG volumes on indices that our customers want,” Octávio Simões, Tellurian’s president and chief executive officer, said in a company statement.
“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. As the world electrifies and our population grows, the demand for reliable, low-cost energy will continue to increase,” he added.
“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,” the Tellurian head continued.
Ben Marshall, the chief executive officer of Vitol, said, “Vitol’s business continues to grow and evolve in the Americas and around the world”.
“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,” he added.
Last month, Tellurian revealed that it and Gunvor Singapore Pte Ltd had signed an LNG SPA for three million tons per annum for a ten-year period, indexed to a combination of the JKM and TTF. The LNG will be delivered free on board from Tellurian’s Driftwood LNG.
Based in Houston, Texas, Tellurian notes on its website that it intends to create value for shareholders by building a low-cost, global natural gas business, profitably delivering natural gas to customers worldwide. The company is developing a portfolio of natural gas production and has nearly 100 drillable locations with an estimated one trillion cubic feet of net resource, its site shows.
To contact the author, email andreas.exarheas@rigzone.com
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