October 31, 2018 / 10:30 AM / in 15 days

Tellurian not buying Toshiba's Freeport LNG volumes, to focus on Driftwood

SINGAPORE (Reuters) - U.S. liquefied natural gas (LNG) company Tellurian Inc (TELL.O) will not be buying Toshiba Corp’s (6502.T) 20-year commitment at Freeport LNG export terminal in Texas, a senior company executive told Reuters on Wednesday.

“We are not in the process, and we are not going to buy Toshiba volumes,” Martin Houston, co-founder and vice-chairman of Tellurian, said on the sidelines of the Singapore International Energy Week.

“It was an opportunity that the market presented, we took a look at it and decided not to pursue it.”

Freeport has 20-year use-or-pay contracts to supply LNG to Toshiba and South Korea’s SK E&S from Train 3 of its LNG export terminal, which is under construction in Texas.

For now, Tellurian is focusing on its Driftwood LNG project, Houston said.

The company is expected to make a final investment decision (FID) in the first half of next year on its Driftwood LNG export terminal in Louisiana.

“We’re focused on building an LNG plant. Once we take an FID, we may consider whether we want to start trading LNG.”

Houston said he is not worried about the trade spat between the United States and China as production from the Driftwood plant is only expected to start in 2023, with first LNG to be delivered to its partners in 2024.

China, the world’s second-biggest LNG importer, slapped a 10 percent tariff on U.S. LNG imports last month, another jab in the trade scuffle in which U.S. President Donald Trump imposed tariffs on $250 billion in imported Chinese goods and China retaliated with duties on $110 billion of U.S. goods.

“I fully expect that this would be behind us, and if it’s not behind us ... then the global industry is quite capable of re-directing volumes,” he said, especially portfolio players who can move volumes around globally to different locations.

Reporting by Jessica Jaganathan; Editing by Tom Hogue

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