Total kicks up investment in Tellurian’s Driftwood LNG

Total kicks up investment in Tellurian's Driftwood LNGImage courtesy of Tellurian

US LNG export project developer, Tellurian signed deals with units of France’s Total for the purchase of volumes from, as well as an investment in the 27.6 mtpa Driftwood LNG project near Lake Charles, Louisiana on the U.S. Gulf Coast.

Tellurian said it has entered into definitive agreements with Total Delaware and Total Gas & Power North America, for the latter to purchase one million tonnes per annum (mtpa) of liquefied natural gas (LNG) from the Driftwood LNG terminal (Driftwood) and for Total to invest $500 million in Driftwood Holdings.

In addition, Tellurian and Total Gas & Power entered into a definitive sales and purchase agreement for an additional 1.5 mtpa of LNG from Tellurian’s LNG offtake volumes from Driftwood. The SPA is for the purchase of LNG free on board at a price based on the Platts Japan Korea Marker.

The definitive agreements are consistent with the terms contemplated by the Heads of Agreement announced on April 3, 2019, and are subject to certain closing conditions, including the final investment decision (FID) to construct Driftwood.

President and CEO Meg Gentle said, “The agreements we have executed with Total confirm the business model for the Driftwood project, establishing it as an LNG joint venture partnership with an implied value of $13.8 billion.”

Gentle noted the project intends to finalize the agreements with the remaining partners and make FID in 2019.

“At full capacity, Driftwood will be capable of exporting approximately 4 billion cubic feet per day of natural gas, providing solutions for the acute U.S. oversupply and delivering cleaner air to the world,” she said.

As previously announced, in April 2019, Tellurian and Total executed a common stock purchase agreement pursuant to which Total will purchase shares of Tellurian common stock for approximately $200 million, subject to certain closing conditions, including the FID to construct Driftwood. Total’s aggregate investment in the Tellurian portfolio will be approximately $907 million at FID.

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