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Tellurian Cuts SPA to Supply Gunvor in Potential Step Forward for Driftwood LNG
Tellurian Inc. said Thursday it has signed a deal to supply a subsidiary of global commodities trader Gunvor Group Ltd. with 3 million metric tons/year (mmty) of liquefied natural gas (LNG) from the proposed Driftwood LNG export terminal in Louisiana.
The announcement was a major step forward for the 27.6 mmty facility proposed near Lake Charles, which has battled through a slump in the export market to keep the project alive. No final investment decision (FID) has been made.
Under the sales and purchase agreement (SPA) with Gunvor Singapore Pte Ltd, Tellurian would supply LNG for 10 years. Volumes would be indexed to the Japan-Korea Marker (JKM) and Dutch Title Transfer Facility (TTF) benchmarks. LNG would be sold on a free-on-board (FOB) basis, and the JKM and TTF prices would be netted back to the Gulf Coast to exclude shipping costs. Most U.S. LNG is sold on an FOB basis, with LNG ownership tra
Tellurian Inc. shares traded 18% higher after the company reported it entered into an agreement with Gunvor Singapore Pte. Ltd. to provide 3 million metric tons of liquefied natural gas yearly, representing the equivalent of approximately $12 billion in revenue over the 10-year term.
Economic recovery and a rebound in liquefied natural gas demand in the world’s largest LNG importing region, Asia, are set to keep spot regional LNG prices around current levels of $10 per million British thermal units (MMBtu) for most of the summer,