Tellurian’s Driftwood LNG project received a major boost after the US LNG developer reported signing a sales and purchase agreement (SPAs) with Shell NA LNG to supply 3M tonnes per annum, says an article published in Riviera.
Secured a new deal
With the SPAs from Shell in hand, Tellurian has now secured three commercial deals for the initial first two plants at Driftwood LNG – about 9 mta of LNG. Each plant would have four liquefaction trains.
“With these SPAs, we have now completed the sales to support the launching of the first two plants,” said Tellurian president and chief executive Octávio Simões. “Tellurian will now focus on financing Driftwood, to give Bechtel notice to proceed with construction in early 2022.”
Developed in multi-phases
Sited on the Calcasieu River near Lake Charles, Louisiana, Driftwood LNG as proposed would be developed in multi-phases with a total capacity of 27.6 mta, making it one of the world’s largest LNG export facilities.
The Shell SPAs follow on the heels of similar agreements with Gunvor Singapore and Vitol in May and June. Sold on a free on board basis at Driftwood LNG, the Shell SPAs are indexed to a combination of two indices: the Japan Korea Marker and the Dutch Title Transfer Facility, each netted back for transportation charges, said Tellurian.
Reducing emission
“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,” said Mr. Simões. “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.”
Added Shell Energy executive vice president Steve Hill, “LNG demand is expected to nearly double by 2040. 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.”
