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 LNG plants near Lake Charles with an export capacity of up to 11 mtpa.

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

According to the August 2024 construction report filed with the US FERC, the Driftwood project continued construction activities including site preparation, excavation and backfill, storm water management, and pile driving activities.

Driftwood LNG also continued activities for water wells as a non-jurisdictional activity under
the early works program.

During August, the project continued maintenance of site roads and drainage efforts, completed piling in LNG Sump area, resumed piling in plant 2, and continued North Pond earthworks.

In September, the project will continue maintenance of site roads and drainage efforts, continue work on temporary South Pond, and continue North Pond earthworks.

The project will also continue piling in plant 2 and start mud mat activities in plant 1.

Tellurian revealed in the July construction update that a new deal with Bechtel for the project has been signed.

“On June 27, 2024, Driftwood LNG and Bechtel finalized and executed LNTP 3,” it said.

“Going forward the project will focus on site preservation, maintenance, the procurement of
additional piles, and the continuation of pile installation in plant 2,” Tellurian said.

Acquisition expected to close in October

Australian LNG player Woodside announced on July 22 that it has entered into a definitive deal to buy Tellurian.

Woodside said the consideration for the transaction is an all-cash payment of about $900 million, or $1.00 per share of outstanding Tellurian common stock, while the implied enterprise value is about $1.2 billion.

In connection with entry into a binding agreement to acquire Tellurian, Woodside will provide a loan to Tellurian of up to $230 million to ensure Driftwood LNG site activity and de-risking activities maintain momentum prior to completion of the transaction, it said.

Woodside is targeting FID readiness for Phase 1 of the Driftwood LNG development opportunity from the first quarter of 2025.

The company’s CEO Meg O’Neill said last week that its acquisition of Driftwood LNG developer Tellurian was “too good to pass up.”

“When the Tellurian opportunity crossed our desk, we thought.. this is really too good to pass up,” O’Neill said during the Gastech event in Houston, Texas.

“You know 27.6 million tonnes, that is as much LNG capacity as we’ve built in our 35 years in Australia,” she said.

According to the CEO, Woodside expects to close the acquisition in October.

Woodside may sell up to 50 percent of the stake in the Driftwood LNG project.