Vitol Seals 20-Year, 1MMtpa Deal to Supply LNG to IRH
Vitol Inc and International Resources Holding (IRH) have finalized a 20-year agreement for Vitol to supply 1 million metric tons per annum (MMtpa) of liquefied natural gas (LNG) to the trading arm of the metals and minerals mining company.
Vitol will deliver the LNG, to be supplied by the Delfin LNG project on the United States Gulf Coast, on a free on board basis.
"We are excited to conclude this agreement with IRH, which makes part of the most valuable holding company in the Middle East and one of the world's largest investment firms", Vitol global head for LNG and European gas and power Pablo Galante Escobar said in a joint statement Thursday. "Vitol has a longstanding commitment to deliver LNG safely and reliably to customers worldwide by leveraging its robust and diverse long-term LNG portfolio".
Ali Rashed Al Rashdi, chief executive of Abu Dhabi-based IRH, said, "This agreement represents an important step in IRH's long-term strategy to build a diversified, resilient, and globally integrated LNG portfolio. Partnering with Vitol allows us to secure reliable supply over the long term while further strengthening our presence across key international gas markets".
Vitol is both an equity investor and offtaker in Delfin LNG through phase 1 of the project, called Delfin FLNG 1. The 2022 offtake agreement entitles Vitol to 1.4 MMtpa.
Earlier this month Delfin Midstream Inc announced a $5 billion investment to launch Delfin FLNG 1, which the developer says would be the United States' first floating LNG facility.
Delfin FLNG 1 would also be "the largest FLNG project globally, with an expected export capacity of 4.4 million tonnes of LNG per year", Delfin said in a press release June 3.
The bigger Delfin LNG deepwater port project offshore Cameron Parish, Louisiana holds federal authorization to export up to 13.2 MMtpa of LNG.
"Concurrent with the FID [final investment decision], a group of investors led by Global Infrastructure Partners (GIP), a part of BlackRock, including existing Delfin investors Mitsui O.S.K. Lines, Ltd (MOL), owner of the world's largest fleet of LNG carriers, Vitol, a leading energy and commodities trader, and Diameter Capital Partners, a leading alternative credit asset manager, have agreed to invest in the first phase of this critical energy infrastructure project", Houston, Texas-based Delfin said.
The first vessel is targeted to start production 2030. Delfin said it is working to secure arrangements toward FIDs in 2027 for 2 more vessels for the Delfin LNG project.
"Delfin FLNG 1 is backed by long-term LNG sales agreements with leading global energy companies including Vitol, Expand Energy, Centrica and Gunvor and has secured all necessary permits and licenses required to begin construction", Delfin said.
The Energy Department granted the project a permit to export to countries with a free trade agreement (FTA) with the U.S. on February 20, 2014 and a non-FTA approval June 1, 2017. The approved volume is equivalent to about 657.5 billion cubic feet (Bcf) per year of natural gas, or 1.8 Bcf per day, as stated by DOE.
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