Houston says Tellurian in talks with multiple LNG buyers

US LNG firm Tellurian, the developer of the Driftwood LNG export plant in Louisiana, is in negotiations with multiple buyers to sell volumes from the facility after it signed a heads of agreement with Aethon, according to Tellurian’s executive chairman Martin Houston.

Dallas-based private investment firm Aethon recently agreed to buy Tellurian’s integrated upstream assets for $260 million. 

The two firms also signed a heads of agreement which contemplates the parties negotiating a 20-year offtake agreement for 2 mtpa of LNG.

This is almost a quarter of the LNG offtake Tellurian aims to sell, as it works to progress the Driftwood project to first LNG in 2028.

“Naturally, the market wishes to see that converted to an SPA and we will do so with pace. I was reassured by Aethon’s readiness to announce the HOA immediately as part of the upstream sale, and its commitment to commence SPA negotiations. This is underway,” Houston said in a new letter to shareholders on June 5.

He said that “negotiations are underway with multiple Tier 1 buyers for the remaining 7 mtpa of LNG”, but he did not reveal the name of the buyers.

There were recent reports claiming that Saudi Arabia’s Aramco and Australia’s Woodside are interested in the Driftwood LNG plant.

“We have also engaged across the board with US natural gas producers who, as a group, recognize that international gas markets provide real upside to prevailing US natural gas prices,” Houston said.

“We are also exploring other commercial propositions and our finance team and financial advisor are working hard on further strengthening the company’s balance sheet,” he said.

“I am quietly confident that soon we will announce additional offtake – or other commercial
agreements – to take Driftwood LNG forward,” Houston added.

Driftwood LNG

Tellurian issued a limited notice to proceed to compatriot engineering and construction giant Bechtel in March 2022.

Under the first phase, Tellurian aims to build two LNG plants near Lake Charles with an export capacity of up to 11 mtpa and worth about $14.5 billion.

The firm recently released the latest construction update and also reported a net loss of about $44 million for the quarter ended March 31, 2024, compared to a net loss of $27.5 million for the same period of 2023.

Tellurian claims it has invested more than $1 billion in the Driftwood project up to date.

The full project would include five plants with a total capacity of about 27.6 mtpa.

Tellurian also said in its March presentation it expects to take a final investment decision in 2024 to build the first two plants at its Driftwood LNG export plant.

Also, the company said it expects to issue a full notice to proceed to Bechtel to begin construction for for the first phase of the plant in the second half of this year.

Most Popular

Hanwha Ocean scores $1.26 billion order for LNG-powered containerships

Hanwha Ocean said on Thursday it will build six containerships with a capacity of 15,000 teu. The order is worth...

Chevron Australia says strike not expected to impact LNG production

The Offshore Alliance, which includes the Maritime Union of Australia and Australian Workers’ Union, said that its members working...

Vopak, Transnet moving forward with South African LNG terminal plans

In January, South Africa’s Transnet National Ports Authority appointed the two firms to build and operate the import facility at the...

More News Like This

Woodside appoints new Tellurian directors

Woodside said on Wednesday it had acquired all issued and outstanding Tellurian common stock for about $900 million cash,...

Woodside wraps up Tellurian acquisition, renames Driftwood LNG

Woodside said on Wednesday it has acquired all issued and outstanding Tellurian common stock for about $900 million cash,...

Tellurian shareholders approve merger with Woodside

Tellurian said in a statement on Friday that its stockholders have approved the merger agreement proposal. The agreement was approved...

Tellurian releases Driftwood LNG construction update

In March 2022, Tellurian issued a limited notice to proceed (LNTP) to Bechtel. Under the first phase, Tellurian aims to build two...