Tellurian to Offer 11mtpa of LNG Under Offtake Agreements

Tellurian to Offer 11mtpa of LNG Under Offtake Agreements

US Tellurian Inc. has announced that it will sell liquefied natural gas (LNG) supplies to non-equity holders to bring its long-delayed Driftwood LNG project to fruition.

“Tellurian aims to offer up to 11 million of its 27.6 million tons per annum (mtpa) output under offtake agreements to get Driftwood across the finish line,” Tellurian Inc. Chairman, Charif Souki said.

Driftwood LNG is a liquefied natural gas (LNG) export facility constructed on a 1,200-acre site on the Calcasieu River west bank, Louisiana on the US Gulf Coast. Driftwood LNG is designed for a total of 27.6 mtpa of export, five plants, 20 trains, three storage tanks, and three berths.

Tellurian abandoned a deal to supply 3 mtpa to commodities trader Vitol Inc a year ago after preferring to focus on selling equity holdings in the project to potential clients.

“Our teams are now re-offering, in addition to what we have offered in the past, a standard offtake agreement at a price that supports the financing,” Souki explained in a video.

Tellurian has changed its strategy for attracting customers and investor funding for the first phase of the $14.5 billion Louisiana facility multiple times. In a recent investor presentation, the company stated that it may sell the first six months of its LNG supply to help finance the project.

The company is responding to the demands of potential customers and adjusting accordingly to them. The company’s updated plan will include a combination of equity and offtake agreements, according to Reuters.

Offering Sale and Purchase Agreements (SPA) as part of its business model is a smart step, according to Ira Joseph, an LNG expert and Senior Research Associate at the Center on Global Energy Policy, at Colombia University.

“Signing SPAs has proven to be a good way to bring LNG projects to a final investment decision (FID), so if they are more open to that in a new and different way than they were before, that sounds positive to me,” he said.

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Doaa Ashraf 454 Posts

Doaa is a staff writer with a Bachelor's Degree in Mass Communication, majoring Journalism from Ahram Canadian University. She has 2-3 years of experience in copywriting, and content creation.

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