Tellurian Inc. (Tellurian) (NASDAQ: TELL) announced today that its
subsidiary, Tellurian Trading UK Ltd. (Tellurian Trading), has entered
into a Memorandum of Understanding (MOU) with Vitol Inc. (Vitol) to
supply 1.5 million tonnes per annum of liquefied natural gas (LNG) from
Tellurian Trading’s LNG offtake capacity at the proposed Driftwood LNG
export terminal. The transaction price is based on the Platts Japan
Korea Marker (JKM) and is for a minimum term of 15 years.
Under the MOU, Tellurian and Vitol have agreed to negotiate a LNG Sale
and Purchase Agreement (SPA) under which Vitol will purchase LNG free on
board (FOB). The SPA will contain certain conditions precedent,
including Tellurian’s receipt of regulatory approvals and a final
investment decision to construct the Driftwood LNG export terminal.
In addition, Vitol is evaluating a potential equity investment in the
Driftwood Holdings partnership.
President and CEO Meg Gentle said, “The LNG business is evolving into a
true commodity market, which includes LNG purchases and sales based on
actual LNG prices rather than indexing to other energy products. JKM has
emerged as the most liquid and transparent pricing mechanism for LNG.
Tellurian is proud to work with Vitol, who has long been known for its
innovation and creativity in the energy commodity markets, to lead LNG
market transformation with a long-term LNG sale at the market index.”
Pablo Galante Escobar, Head of LNG, Vitol added, “We are very pleased to
have concluded this agreement with Tellurian, which is at the forefront
of LNG in the U.S. Tellurian’s integrated Driftwood project offers a
unique value proposition, which we are pleased to participate in as off
takers and potential equity investors.”
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Estimated Driftwood project timeline
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Catalyst
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Estimated timeline
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Final Environmental Impact Statement
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18 January 2019
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Driftwood final investment decision
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1H 2019
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Begin construction
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1H 2019
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Begin operations
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2023
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About Tellurian Inc.
Tellurian was founded by Charif Souki and Martin Houston and is led by
President and CEO Meg Gentle. Tellurian intends to create value for
shareholders by building a low-cost, global natural gas business,
profitably delivering natural gas to customers worldwide. Tellurian is
developing a portfolio of natural gas production, LNG trading, and
infrastructure that includes an ~ 27.6 mtpa LNG export facility and an
associated pipeline. Tellurian is based in Houston, Texas, and its
common stock is listed on the Nasdaq Capital Market under the symbol
“TELL”.
For more information, please visit www.tellurianinc.com.
Follow us on Twitter at twitter.com/TellurianLNG.
CAUTIONARY INFORMATION ABOUT FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements within the
meaning of U.S. federal securities laws. The words “anticipate,”
“assume,” “believe,” “budget,” “estimate,” “expect,” “forecast,”
“initial,” “intend,” “may,” “plan,” “potential,” “project,” “proposed,”
“should,” “will,” “would,” and similar expressions are intended to
identify forward-looking statements. Forward-looking statements herein
relate to, among other things, the parties’ negotiation of a definitive
LNG SPA, certain conditions precedent to the parties’ obligations under
the LNG SPA, including Tellurian’s receipt of regulatory approvals and
making a final investment decision to construct the Driftwood LNG export
facility and associated pipelines, and a potential equity investment by
Vitol in the Driftwood Holdings partnership. These statements involve a
number of known and unknown risks, which may cause actual results to
differ materially from expectations expressed or implied in the
forward-looking statements. These risks include the matters discussed in
Item 1A of Part I of the Annual Report on Form 10-K of Tellurian for the
fiscal year ended December 31, 2017, Item 1A of Part II of the Quarterly
Report on Form 10-Q of Tellurian for the quarterly period ended
September 30, 2018, and other filings with the SEC, all of which are
incorporated by reference herein. Tellurian and Vitol may not be able to
negotiate a definitive LNG SPA as contemplated by the MOU. There can be
no assurance that the LNG SPA with Vitol or Vitol’s potential equity
investment in the Driftwood Holdings partnership will be completed on
the terms discussed herein or at all. The forward-looking statements in
this press release speak as of the date of this release. Although
Tellurian may from time to time voluntarily update its prior
forward-looking statements, it disclaims any commitment to do so except
as required by securities laws.
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