Tellurian to sell LNG to Gunvor, delays Louisiana project start

Tellurian Inc. signed a 10-year agreement with commodity trader Gunvor Group for 3 million tons per year (MMtpy) of LNG.

Tellurian said the agreement represents the equivalent of about $12 billion in revenue over the 10-year term.

Demand for super-cooled LNG has surged in recent years as large energy-consuming nations like China and India wean themselves off dirtier coal and is expected to continue scaling new highs.

However, customers have been reluctant to sign long-term purchase agreements after global gas prices fell to their lowest in years during a supply glut in 2019 when a record number of LNG projects entered service.

Last year, prices dropped even further, hitting record lows due to coronavirus demand destruction.

Tellurian said on Thursday the LNG would be delivered from Driftwood LNG, a 27.6 MMtpy liquefaction facility it proposed near Lake Charles, Louisiana in the U.S. Gulf Coast.

Tellurian co-founder and Executive Chairman Charif Souki said in January the company is targeting this summer to begin construction of its $16.8 billion Driftwood LNG export project.

The first phase of Driftwood is slated for operation in 2025, and will produce about 16.5 million tons per year of LNG, equivalent to about 2.2 billion cubic feet per day of natural gas. One billion cubic feet of gas is enough to supply about five million homes for a day.

(Reporting by Arunima Kumar in Bengaluru; Editing by Krishna Chandra Eluri)

 

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