Tellurian slashes net loss as it prepares to start Driftwood construction in April

US LNG export project developer Tellurian reported a lower net loss in 2021, as it prepares to start construction on its planned Driftwood project in Louisiana in April.

Tellurian posted a net loss of about $114.7 million, compared to a loss of $210.6 million in 2020.

The firm generated about $71.3 million in revenues from natural gas and LNG sales. It ended the year with about $305.5 million in cash and cash equivalents.

In addition, Tellurian drilled and put into production four new Haynesville operated natural gas wells, increasing its proved developed reserves by about 51 billion cubic feet (Bcf) as of December 31, 2021.

According to Tellurian, the Houston-based firm produced 14.3 Bcf of natural gas in 2021. The company’s existing natural gas assets include 11,060 net acres, interests in 78 producing wells, and estimated proved reserves of 323.3 Bcf.

Driftwood LNG construction

The firm’s co-founder Charif Souki recently confirmed that Tellurian would start construction on its Driftwood project in April.

Tellurian started preparatory works on the Driftwood site last year and also exercised a long-term site lease.

Last year, it signed three 10-year LNG supply deals for the Driftwood project for a total of 9 mtpa. These include contracts with Gunvor, Vitol as well as Shell.

Tellurian has sold all the necessary offtake for the first phase of the Driftwood LNG plant which would include two units with a capacity of about 11 mtpa.

Total development costs for this phase would reach about $11.9 billion.

“The global economy is in the early stages of an energy super cycle driven by strong demand for natural gas and several years of underinvestment in energy infrastructure,” president and CEO Octavio Simoes said on Wednesday.

He said Tellurian was “optimally positioned” with fully executed market-based LNG SPAs and a permitted project.

“Bechtel will begin construction of Driftwood LNG in April and we will seek to conclude the financing process shortly thereafter,” he said.

Simoes added that Tellurian would continue the company’s natural gas development program. The firm expects to drill, complete and place into production additional operated Haynesville wells during 2022.

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