Tellurian looking to sell its upstream assets

US LNG terminal developer Tellurian is exploring the sale of its Haynesville upstream assets as it works on securing financing for the first phase of its Driftwood LNG project worth about $14.5 billion.

The company said in a statement on Tuesday it has asked its financial advisor, Lazard, to explore opportunities for the sale of its upstream business.

Tellurian produced 19.5 billion cubic feet (Bcf) of natural gas for the quarter ended September 30, 2023.

The company’s natural gas assets include 31,149 net acres, interests in 159 producing wells and over 400 drilling locations.

Tellurian recently appointed Lazar as a financial adviser to assist with shaping commercial structures as well as balance sheet management.

Tellurian’s co-founder Martin Houston and new chairman of the board revealed more details on this move in a letter sent to shareholders on January 29.

In December, the company appointed Houston as the chairman replacing Charif Souki, who has left the Driftwood LNG terminal developer.

“As we commercialize Driftwood LNG, Tellurian has been reviewing its strategy, including the dynamics of the US natural gas market in the context of global LNG demand,” CEO Octavio Simoes said.

“We have concluded that there are alternative gas supply strategies available to us from various basins and our ownership of upstream assets is not necessary at this stage of Tellurian’s development. We have a substantial number of drilling locations that we believe will be highly attractive to oil and gas producers that can develop them more quickly than we would,” he said.

“By unlocking the full value of these high-quality assets, we aim to substantially reduce our debt, further reduce our general and administrative expenses, and provide additional cash, enabling us to develop Driftwood LNG. Currently, this approach is more attractive than issuing equity to fund our 2024 development activities and working capital needs,” Simoes added.

Driftwood LNG

As per the Driftwood project, Tellurian issued a limited notice to proceed to compatriot engineering and construction giant Bechtel in March 2022 and it said in August last year that Bechtel completed piling work for the first plant and also concrete pouring for all plant one compressor foundations.

Tellurian also recently released the December construction report.

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

However, the company is still working to secure financing for the project.

Tellurian previously said it expects the first phase to cost about $14.5 billion with about $6 billion equity investment.

Most Popular

Another steam LNG carrier sold for demolition

An NYK-managed steam liquefied natural gas (LNG) carrier has been sold for demolition, according to brokers.

Canada approves Ksi Lisims LNG project

According to a statement on Monday, Julie Dabrusin, Minister of Environment and Climate Change, issued her decision under the...

Abaxx sees significant volume growth in its LNG futures

Abaxx Commodity Futures Exchange, a wholly owned subsidiary of Abaxx Technologies (CBOE:ABXX) has seen significant volume growth in its physically deliverable LNG futures during the past summer months, according to Abaxx Exchange Chief Commercial Officer Joe Raia.

More News Like This

Woodside: first Louisiana LNG train more than 22 percent complete

The first train of Woodside's $17.5 billion Louisiana LNG export terminal in the US is more than 22 percent complete, as the company works to start first LNG production at the three-train facility in 2029.

Woodside working to charter vessels to ship Louisiana LNG cargoes, CEO says

Australian LNG player Woodside is currently working through how many chartered liquefied natural gas carriers the company will need to ship cargoes from its Louisiana LNG export terminal in the US, according to CEO Meg O’Neill.

Woodside’s profit drops in H1

Australian LNG producer Woodside reported a 24 percent drop in its first-half profit due to lower prices, depreciation costs, and a pre-tax impairment on the H2OK project following the decision to scrap the US hydrogen project.

Work progresses on Woodside’s Louisiana LNG export plant

Australian LNG player Woodside is moving forward with construction work on its Louisiana LNG export terminal.