Tellurian says Driftwood LNG deal with TotalEnergies terminated

US LNG firm Tellurian said it has terminated a stock and liquefied natural gas purchase deal with France’s TotalEnergies.

Tellurian and the French energy giant signed several deals in 2019 under which the latter had agreed to make a $700 million investment in Tellurian’s Driftwood LNG project.

In addition, TotalEnergies had also agreed to purchase up to 2.5 million tonnes per annum of LNG from the proposed project in Louisiana.

Tellurian said in a filing to the stock exchange on Monday it had terminated the stock purchase deal dated April 3, 2019.

Under the terminated deal, TotalEnergies had agreed to purchase, and Tellurian had agreed to issue and sell 19,872,814 shares of Tellurian common stock in exchange for a cash purchase price of $10.064 per share, subject to the satisfaction of certain closing conditions, the firm said.

Also, Tellurian said it has terminated an equity capital contribution agreement dated July 10, 2019, which governed the terms of the proposed investment by TotalEnergies.

As a result, the LNG sales and purchase agreement under which TotalEnergies had the right to buy up to 1.5 mtpa of LNG from Driftwood automatically terminated, according to Tellurian.

One of the main conditions for the deals included Tellurian taking a final investment decision by July 10, 2021.

“Not consistent” with two new LNG supply deals

Teluurian said in the filling the deals with Total were terminated because “they are not consistent with the commercial agreements that Driftwood LNG has reached with other counterparties.”

Tellurian has recently signed two agreements with Vitol and Gunvor. Combined the two deals represent an aggregate of $24 billion in revenue and six mtpa of contracted volumes over the ten-year period.

In addition, the firm has exercised a long-term site lease option for its planned Driftwood project in Louisiana as it looks to start works on preparing the construction site.

Charif Souki, Tellurian’s co-founder and executive chairman, recently said that Tellurian has to complete three things to prepare the site for full construction including widening a state highway, relocating a pipeline that crosses the property now, and some soil preparation.

Moreover, Souki confirmed that the firm plans to give notice to proceed to contractor Bechtel in the first quarter of next year.

The firm plans to build the proposed 27.6 mtpa Driftwood project in two phases. The first phase would have a capacity of 16.6 mtpa. This phase could go online in 2025.

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