Tellurian exercises lease option for Driftwood LNG
US natural gas company Tellurian said June 29 it had exercised a long-term lease option for its proposed Driftwood LNG export facility in Louisiana.
The company said it made the decision with harbour officials in Lake Charles, Louisiana for a 477-acre site. The lease agreement has an initial term of 20 years, with an extension option for up to 50 years.
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“Tellurian is taking necessary steps to prepare for Driftwood LNG construction by entering into this long-term lease and executing certain projects such as road improvements and utility relocation,” Tellurian COO Keith Teague said. “We have an active and productive relationship with Port of Lake Charles officials and they have been helpful partners from the early development and site selection of our liquefied natural gas export terminal.”
NASDAQ-listed Tellurian in early June 3 landed a sales and purchase agreement (SPA) to supply LNG from the Driftwood export facility to commodities trader Vitol.
The contract covers 3mn mt/yr of supplies over a 10-year period, with Tellurian estimating the deal's worth at approximately $12bn. The deliveries will be made on a free-on-board basis, indexed to a combination of the Japan Korea Marker and the Dutch Title Transfer Facility.
Tellurian last month reached a 10-year deal to supply 3mn mt/yr of LNG from Driftwood to Vitol's rival Glencore, bringing the project a key step closer to realisation.
Tellurian plans to market up to 10mn mt/yr of LNG supply from the first 16.5mm mt/yr phase of Driftwood. The company hopes to launch the terminal in 2025, but has yet to take a final investment decision because of delays securing customers for its gas.