May 30, 2024 [Reuters]- Aethon Energy said on Wednesday it would buy Tellurian’s upstream assets for $260 million and signed a deal that could allow the investment firm to purchase two million tons per annum of liquefied natural gas from Tellurian’s Driftwood LNG plant.

Shares of the U.S. LNG developer rose 13.2% in premarket trading.

Reuters had reported earlier this month that Tellurian sent home more than a dozen workers from its upstream gas production business amid sale talks.

The LNG developer had ousted its chairman and co-founder Charif Souki late last year after auditors raised doubts about the company’s ability to cover future expenses.

The company said in March 2024 it was looking at all options, including a potential sale, and that Octavio Simoes had stepped down as CEO amid its efforts to keep the Driftwood export project alive.

Tellurian has been trying to develop the 27.6-million-metric-tons-per-annum LNG plant in Lake Charles, Louisiana, which suffered multiple delays.

The company has changed its Driftwood strategy several times over the years, never attracting enough potential clients for the first, $14.5 billion phase of the facility.

Tellurian has also lost potential customers for Driftwood over the years, including trader Gunvor Singapore Pte Ltd.

Aethon Energy said the deal would add about 100 millions of cubic feet per day of gathering and treating systems capacity to its portfolio, bringing total capacity to more than 3 billions of cubic feet per day across its assets.

Tellurian said it would use the proceeds from the transaction, which is expected to close during the second quarter, to reduce borrowings and for general corporate purposes.

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