Tellurian Inc. and Gunvor Singapore Pte. Ltd. signed a 10-year sales agreement for 3-million tonnes/year (tpy) of LNG indexed to a combination of the Japan Korea Marker (JKM) and the Dutch Title Transfer Facility (TTF), netted back for transportation charges. LNG would be delivered free on board (FOB) from Tellurian’s proposed 27.6-million tpy Driftwood LNG plant near Lake Charles, La.
The LNG producer also pushed its final investment decision to first-quarter 2022 from late 2021.
Tellurian said it intends to market up to 10 million tpy of its 16.6-million tpy Phase 1 on a JKM, TTF, or blended price basis.
The company last year withdrew prefiling for its 2.3-bcfd Permian Global Access pipeline (OGJ Online, Dec. 14, 2021), and has since announced plans to produce its own natural gas. Its only previous sales arrangement was a non-binding heads-of-agreement with Total SE for 1 million tpy, signed before either of these decisions.
The Gunvor agreement will generate about $12 billion in revenue, according to Tellurian.
Cowen & Co. described the moves as “a step back” given that Tellurian “appears [to] now need to secure offtake for the full Phase 1 vs. previously planning to own 40% of the project” (6.6 million tpy), “making FID more challenging.”