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Oil major Royal Dutch Shell has agreed to buy 3 million mt/year of LNG from Tellurian's proposed Driftwood LNG export terminal in Louisiana, the companies said in a joint statement July 29.

Total offtake commitments to Driftwood LNG now stand at 9 million mt/year, just shy of the expected 9.2 million mt/year two-plant first phase of the project. Each plant is expected to have up to four liquefaction trains.

"With these SPAs, we have now completed the sales to support the launching of the first two plants," Tellurian CEO Octavio Simoes said in the statement. "Tellurian will now focus on financing Driftwood, in order to give Bechtel notice to proceed with construction in early 2022."

The developer has yet to sanction full construction of the up to 27.6 million mt/year facility, although the three medium-term supply contracts that have now been signed put Tellurian on a solid path. A 2019 partner and supply agreement with France's TotalEnergies that covered 2.5 million mt/year of Driftwood volumes was terminated.

The sale and purchase agreements, or SPAs, signed with Shell are on a free on board basis at Driftwood, indexed to a combination of the Platts JKM and the Dutch TTF, each netted back for transportation charges.

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