Souki confident Tellurian will secure $7 billion from banks to finance Driftwood LNG

Tellurian’s co-founder and executive chairman, Charif Souki, is “highly confident” that the company will secure $7 billion from banks to finance the first phase of its Driftwood LNG export project.

Earlier this year Souki said that the LNG terminal developer is in talks with “several equity providers” as it looks to secure financing for its project.

Under the first phase, Tellurian aims to build two LNG plants near Lake Charles with an export capacity of up to 11 mtpa and expects the costs to reach about $13.6 billion.

While Tellurian is working on financing of the project, US engineer and construction giant Bechtel is moving forward with the initial site works under a limited notice to proceed issued in March last year.

In addition, Tellurian recently signed a land sale and leaseback deal for the Driftwood land worth $1 billion with a New York-based institutional investor.

Souki said in video update posted by Tellurian on Monday that the “very creative financial transaction” includes some property that the company purchased and some property that Tellurian leases from various entities including the Lake Charles Port Authority.

He recently visited the Driftwood site and said that the company and Bechtel have made and “amazing progress” in de-risking the project with up to 250 workers working at the site.

“That has a value, so what we have done with this New York-based fund is to organize a $1 billion financing which we will then lease back from them for 40 years with multiple options to renew, and that will cost us roughly 15 to 18 cents per MMBtu that will be in the operations and maintenance of the facility,” Souki said.

He said that this is a “very very affordable” transaction for Tellurian.

Souki said that Tellurian has contributed about $1 billion in Driftwood LNG and this new financing, which will close at the same time with the rest of the financings, is a “major step forward”.

“We will be talking to our banks next week in New York, and given what is happening in the market we’re highly confident that we’ll be able to get $7 billion from the banks,” Souki said.

“And that $13 billion project will be left with $3-4 billion of additional equity or equity type instruments that we will get from counterparties that will invest directly in Driftwood or from our own resources over the next three or four years,” he said.

“This is a very exciting piece of news for us because the dominoes are starting to fall in place and one thing leads to another. We have now contributed or can contribute $1 billion already and another $1 billion closing from this financing, and the rest is starting to fall into place,” Souki added.

- Advertisements -

Most Popular

Golden Pass LNG to speed up pipeline construction

QatarEnergy and ExxonMobil are seeking approval from US energy regulators to increase the peak workforce to speed up the...

US FERC to decide on Venture Global’s CP2 LNG project

The US FERC is set to decide next week on Venture Global LNG's proposed CP2 LNG project in Louisiana. According...

Japan’s Chiyoda provides Golden Pass LNG update

Japan's engineer Chiyoda has released an update regarding the construction of the Golden Pass LNG export project in Texas,...

More News Like This

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...

Aethon to buy Tellurian’s upstream assets for $260 million

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

Tellurian updates on Driftwood LNG construction work

US LNG terminal developer Tellurian released the latest construction update for the first phase of its Driftwood LNG terminal...

Tellurian’s net loss widens in Q1, Driftwood LNG talks continue

US LNG firm Tellurian reported a widening first-quarter loss on Thursday, as it continues to work to secure financing...